Employee Benefits Trends Shaping 2027 Planning for Mid-Market Employers

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Benefits planning for 2027 is already underway for many mid-market employers, and the landscape looks different than it did even a year ago. Medical trend rates are climbing, pharmacy costs continue to expand, and funding models that were once considered alternative are becoming standard parts of the conversation. Employers who start reviewing these shifts now will have more room to make deliberate decisions before renewal season arrives.

Here is what is shaping employee benefits strategy heading into 2027, and where employers can focus their attention first.

Medical Cost Trends Are Reaching a 17-Year High

Industry projections point to a commercial medical trend rate near 9% for 2027, the highest figure recorded in 17 years. Chronic condition prevalence, specialty medication costs, and rising utilization across cancer care and mental health services are the primary drivers behind that number.

For employers, a higher trend rate translates directly into renewal pressure. Plans that were sustainable at an 8% trend rate may require a fresh look at plan design, network structure, and funding approach to stay within budget for 2027.

What a 9% Trend Rate Means for Renewal Planning

A rising trend rate affects fully insured and self-funded employers differently. Fully insured groups will likely see that pressure reflected directly in premium increases. Self-funded and level-funded employers carry more of that risk directly, which puts a greater emphasis on claims data, stop-loss coverage, and fiduciary oversight. Employers exploring which funding structure fits their organization can review the differences in level funding, self-funding, and captive arrangements as a starting point.

Pharmacy Spending Keeps Expanding, Led by GLP-1 Medications

Pharmacy costs, and GLP-1 medications in particular, remain one of the fastest-growing line items in employer health plans. Average annual costs per participant on these medications are running around $6,000, and new oral formulations and pipeline drugs are expected to expand utilization further into 2027.

At the same time, new pricing platforms tied to federal drug pricing initiatives are starting to reshape how employees and employers access prescription discounts. Employers are watching these developments closely as they weigh how much of that cost shift reaches their own plans.

Building Eligibility and Utilization Guardrails

Employers are responding by refining eligibility criteria, prior authorization requirements, and lifestyle program participation rules tied to these medications. That kind of structure helps employers manage cost exposure while still offering meaningful coverage. Wellness programs built around real utilization data play a role here too, and employers can see how that approach works in practice in this piece on data-driven wellness programs and cost containment.

Alternative Funding Models Are Gaining a Larger Share of the Market

Level funding, captives, and Individual Coverage Health Reimbursement Arrangements (ICHRAs) have moved from niche options to mainstream consideration. ICHRA participation has roughly tripled over the past two years, and industry forecasts suggest it could triple again by 2027 as more employers look for predictable, defined-contribution alternatives to traditional group plans.

Part of that momentum comes from the expiration of enhanced ACA premium tax credits at the start of 2026, which raised individual market costs for many employees and pushed employers to look more closely at how their contribution structure supports their workforce.

Level Funding, Captives, and ICHRAs Move Into the Mainstream

Each of these funding models carries a different risk and reward profile, and the right fit depends heavily on company size, claims history, and workforce composition. Employers weighing fully insured coverage against a level-funded approach can find a breakdown of the cost and risk tradeoffs in this comparison of fully insured versus level-funded health insurance. Organizations evaluating whether they have the population size to support self-funding can also reference what size companies should consider self-funding.

Personalized, Class-Based Benefits Design Continues to Expand

One-size-fits-all benefits packages are giving way to more segmented approaches. Employers are structuring contributions and coverage by employee class, life stage, and even geography, using data to shape offerings that fit a more varied workforce.

This is especially relevant for employers with hourly, seasonal, or multi-location teams, where a single benefits structure rarely serves everyone well. Employers building out this kind of segmented approach can review the compliance guardrails in this piece on structuring benefits contributions across employee classes, along with considerations specific to hourly and variable workforce employers.

AI and Data Are Becoming Core to Benefits Administration

Artificial intelligence is playing a larger role in how benefits are administered, from streamlining enrollment to flagging utilization patterns that inform plan design. Governance is becoming just as important as adoption here, with employers building oversight into how AI tools are used across HR and benefits functions.

An HRIS platform that centralizes this data gives HR teams a stronger foundation for these decisions. Employers looking to strengthen that infrastructure can learn more about HRIS solutions and how they support benefits administration at scale.

Compliance and Fiduciary Oversight Are Getting More Attention

Regulatory scrutiny around plan governance continues to increase, particularly for self-funded and level-funded employers who carry more direct fiduciary responsibility. Nondiscrimination testing, documentation, and disclosure requirements remain a consistent area of focus heading into 2027.

Employers who want a refresher on how these rules apply to group health plans can revisit this overview of federal nondiscrimination laws for group health benefits, or review compliance support services built specifically for employer-sponsored plans.

Benefits Strategy and HR Strategy Are Converging

Benefits decisions increasingly touch recruiting, retention, and workforce planning, which means they rarely sit well in isolation from broader HR strategy. Employers who align the two are better positioned to respond to cost pressure without creating gaps in compliance or employee experience.

This connection is explored further in why your benefits strategy should not be separate from HR strategy, and employers without dedicated HR bandwidth can also look at how fractional HR support helps bridge that gap.

Planning Ahead for 2027

The employers who fare best through 2027 renewals will be the ones who start reviewing their funding structure, plan design, and compliance posture well before decisions are due. Trend rates, pharmacy costs, and workforce expectations will keep evolving, and building that review into an annual planning rhythm gives employers more flexibility to respond as the year unfolds.

Parker Insurance works with employers throughout this process, from evaluating funding models to building out compliant, class-based benefits strategies. Reach out to our team to start planning for 2027.

Small Group Health Insurance in California: How Employers Under 100 Employees Still Control Costs

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California’s small group health insurance rules create real limits for employers. If your company has fewer than 100 employees, the state classifies you as small group, and that classification shapes what your broker can and cannot do when it comes to plan design and cost containment. Employers often assume this means fewer options and higher costs year over year. In practice, there is still room to build a strategy that lowers costs and keeps employees covered well.

Brian Alexander, founder of Parker Insurance, works with small group employers across San Diego and Southern California every day. He explains where the state draws the line, and where employers still have room to move.

Understanding California’s Small Group Threshold

California defines small group coverage as any employer with under 100 employees. That threshold determines the rules a fully insured plan has to follow, and it removes some of the customization that larger, self-funded groups can access.

“In the state of CA you’re considered small group if you’re under a hundred employees,” Brian explains. “So it does limit us a little bit in what we can do as far as plan designs, cost containment, things of that nature. But we still can get creative.”

That last point is where the real strategy work happens. The regulatory framework is fixed, but the plan design choices within it are not.

Two Ways Small Group Employers Still Control Costs

Skinny Networks Paired with Full Networks

One approach Parker Insurance uses regularly is offering a narrower network alongside a full network, side by side, so employees can choose based on where they already get care.

In San Diego, that might mean a network built specifically around Scripps facilities, doctors, and hospitals. Employees who already have access to care within that system get meaningful savings. Employees who need broader access keep the full network as an option.

“We can have networks that are just going to be the Scripps facilities, Scripps Doctors, Scripps Hospitals, et cetera,” Brian says. “We pair that with a full network… that’s going to show those employees about 12 to 13% savings compared to the full network.”

The value here is choice. Employers are not forced into a single network for the whole team. Employees who fit the narrower network save money. Employees who need the broader one still have it.

Contribution Strategy Built Around Utilization

The second lever is contribution strategy, structuring how much the employer funds based on how employees actually use their coverage.

A low cost, fully employer-funded plan option works well for employees who use their benefits infrequently. Employees with young families, ongoing care needs, or a chronic condition can then choose to buy up into a richer plan, paying the difference to access more comprehensive coverage.

“We’ll look at a low cost plan option that the employers can fully fund,” Brian says. “Those individuals that do utilize the plan, those who have young families or are high utilizers, maybe they have a chronic condition, they can then buy up to a richer plan and realize the full benefits of those richer plans.”

This structure lets the employer control the baseline cost while still giving higher-need employees a path to more coverage. For a deeper look at how contribution structures work across different employee classes, see our post on how to structure employee benefits contributions across different employee classes.

Building a Strategy That Fits Your Workforce

Small group employers in California work within a defined regulatory box, but the strategy inside that box still matters. Network selection and contribution design both give employers a way to manage renewal costs while keeping coverage relevant to the people actually using it.

For employers exploring how funding structure affects cost and flexibility more broadly, our comparison of level funded, self funded, and captive arrangements is a useful next read, along with our breakdown of cost sharing versus cost containment strategies. Employers with fluctuating or hourly teams may also find value in our guide to designing benefits for hourly and variable workforce employers.

Parker Insurance works with San Diego employers to build benefits strategies suited to their workforce and budget, using data-driven employee benefits planning rather than a one-size-fits-all renewal. As group sizes grow and workforce needs shift year over year, this kind of strategy work becomes an ongoing part of how a company manages its benefits program.

Frequently Asked Questions

What counts as a small group employer in California? California classifies any employer with fewer than 100 employees as small group for health insurance purposes. This classification determines which plan design and cost containment options are available under state rules.

Can small group employers in California customize their health plans? Small group employers have less flexibility than large groups when it comes to fully insured plan design. Employers can still build strategy through network selection and contribution structure, even within those limits.

What is a skinny network, and how does it save money? A skinny network is a narrower provider network, often built around a specific health system, offered alongside a full network. Employees who use providers within that system can see savings, in some cases around 12 to 13%, compared to the full network option.

How does a contribution strategy help control benefits costs? A contribution strategy funds a low cost base plan for employees who use benefits less often, while giving higher-need employees the option to buy up into a richer plan. This keeps the baseline cost manageable for the employer while still supporting employees who need more coverage.

Who should consider this kind of small group strategy? Any California employer under 100 employees looking to manage renewal costs without reducing the quality of coverage available to their team is a good candidate for this approach.

Best Employee Perks to Improve Retention and Company Culture in 2026

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Employee perks can be powerful. The right ones make employees feel valued and connected. The wrong ones feel out of touch and can leave your team questioning whether leadership really understands them.

So how do you offer perks that actually matter without overspending?

The competition for good people has not let up, and benefits strategy has become one of the clearest signals a company can send about how it treats its workforce. According to SHRM’s 2025 Employee Benefits Survey, 88% of employers rated health-related benefits as extremely or very important, and flexible work arrangements are still offered by 68% of organizations. But health coverage and flexibility are table stakes now. What sets companies apart is what they layer on top. 

Perks vs. Benefits vs. Incentives

These three categories are easy to blur, but they serve different purposes. Benefits are foundational, long-term offerings like health insurance, retirement plans, and paid time off. Perks are cultural extras designed to make work life more enjoyable, things like free lunches, pet-friendly offices, or professional development stipends. Incentives are performance-driven rewards such as bonuses, commissions, or gift cards.

Perks cannot replace strong benefits, but they do help shape company culture in ways employees notice and remember.

Matching Perks to Culture

The best perks reflect your workforce and your values. Companies with remote or hybrid teams might offer stipends for home office equipment or coworking space access. Workforces that spend most of their time on-site might appreciate free meals, upgraded break spaces, or wellness resources available at work. A high-growth firm might prioritize learning stipends or conference passes.

Perks that align with culture feel intentional. Mismatched perks can feel tone-deaf, and employees notice the difference.

Top Employee Perks That Work in 2026

Here are some of the most effective, budget-conscious perks working well for mid-sized employers right now:

  • Flexible schedules and hybrid options – Control over when and where people work has become an expectation for many employees, not a bonus.
  • Wellness stipends – Funds employees can direct toward gym memberships, meditation apps, or therapy sessions give people flexibility and signal that the company cares about the whole person.
  • Professional development allowances – Professional and career development benefits were ranked among the most important offerings by 65% of employers in SHRM’s latest survey, making learning stipends, certifications, and industry memberships a smart investment for companies focused on retention. 
  • Recognition programs – Peer-to-peer shoutouts, monthly spotlights, or simple public acknowledgment go a long way without requiring a large budget.
  • Experience-based rewards – Concert tickets, sporting events, or team outings create shared memories that strengthen culture in ways cash bonuses often do not.
  • Volunteer and community days – Paid time to contribute to causes employees care about resonates especially well with teams that value purpose alongside pay.
  • Family-friendly perks – Childcare assistance, parental support groups, or family-inclusive company events acknowledge that employees have lives outside of work.

The Bottom Line

You do not need an endless budget to offer perks that matter. You need perks that align with your employees’ real needs and reflect your company’s values. When chosen well, perks boost engagement, strengthen loyalty, and help you stand out in a competitive talent market.

At Parker Insurance, we help mid-market employers design benefits and perks strategies that support culture and retention without overspending. The best perks are the ones your team actually values, and we can help you figure out what those are.

Who Is Level Funding Best For? 

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A Mid-Market Guide to Lower Health Benefit Costs Without Losing Talent

Mid-market employers are stuck in the same loop every renewal season, premiums rise, plan changes frustrate employees, and the business absorbs more cost for benefits that do not feel better.

Level funding is a structured plan design that can deliver real savings, real data, and more control, without putting the employer on the hook for a worst-case claims year.

“Level funding is sort of a baby step into the self-funding market.” giving employers the mechanics of self-funding, with guardrails that reduce the fear of volatility.

What is a level funded health plan?

A level funded plan is a hybrid between fully insured and self-funded coverage. The employer pays a predictable monthly amount, which typically includes:

  • Administrative costs to run the plan
  • Stop-loss protection (the safety net)
  • A claims fund component based on expected claims

Employers gain transparency and ownership of information without the added risk of being fully self-funded.

Level funding gives you all of the advantages of full transparency, the data, the medical history of the employees, while also protecting the employer from being personally responsible for overruns in a bad year.

Why level funding helps retain talent

Benefit strategies that rely on raising deductibles, reducing benefits, or narrowing networks, often result in employees who feel less taht appreciated and cared for. If competitors offer a plan that is more usable and lower cost, that becomes a recruiting advantage.

Level funded plans can be a better approach. Instead of cutting benefits, level funded plans create room to design benefits employees really want, and to manage spend using data rather than guesses. 

Who level funding is best for

Level funding is most effective for employers who want the cost containment benefits of self-funding, but are not ready to take on the financial exposure of going fully self-insured.

Here are the best-fit traits Parker Insurance looks for.

Employers with roughly 50 or more employees

Level funding generally requires enough covered lives to make claims predictable and to justify the data-driven approach.  The plan works best when the group is large enough that claims variation is manageable.

Employers with a healthy, stable population and credible claims history

Level funding is underwriting-driven. A group does not need to be “perfect,” but it does need to be a fit from a demographic and risk standpoint. That includes enrollment stability, a manageable claims profile, and a workforce population that supports predictable utilization patterns.

If the data indicates an unusually high risk profile, level funding may not outperform fully insured pricing in the first year.

Employers who want transparency and are willing to use it

Level funding’s value comes from visibility into claims drivers and the ability to make smarter decisions over time. When leadership only wants a lower premium with no operational change, results tend to disappoint.

Employers who want upside without downside exposure

In a good claims year with Level Funding, there is potential for a refund from the carrier. However, in a bad claims year, with, say, a 100% overrun on claims,  the employer is not responsible for paying the overrun. The carrier assumes all of that risk.

That combination, upside potential and a risk backstop, is what makes level funding a practical entry point.

Employers willing to take on modest extra administration

Level funding comes with additional administrative responsibility compared to fully insured plans. That is not a reason to avoid it, but it is part of the assessment. The best-fit employers understand that small operational effort can unlock meaningful cost control.

When level funding may not be the right move

Level funding is not a universal solution. A few common friction points show up consistently.

Organizations deeply tied to Kaiser

If a company is heavily enrolled in Kaiser, it’s hard to rip that bandaid off. In many markets, a Kaiser-heavy strategy can limit plan design options and complicate transitions, even when the economics of level funding look strong. The same is true of an HMO.

Employers who cannot tolerate any uncertainty

Level funding still involves a shift in mindset. Even with guardrails, it is a more engaged model than fully insured coverage. If leadership wants zero change, zero learning curve, and the same approach year after year, fully insured may remain the more comfortable path.

Groups that do not meet underwriting fit

If demographic factors or claims history indicate misalignment, the model may not price well initially. That does not mean “never,” it means timing and structure matter.

How level funding fits into a longer-term strategy

Level funding is often the first step toward deeper cost control, from level funding, to a captive, to fully self-insured, depending on the company’s size, maturity, and appetite for risk.

What to evaluate before switching to a level funded plan

A credible level funding assessment should address:

  • Employee count and participation levels
  • Current plan design and contribution strategy
  • Claims experience and risk drivers
  • Network needs and carrier options
  • Administrative readiness and internal bandwidth
  • Financial goals, including savings targets and tolerance for change

At Parker Insurance, this is where the conversation gets practical. Level funding can be a no-brainer for the right group, but “right group” is not a guess, it is a data-backed determination.

FAQ: Level Funded Health Plans

What is a level funded health plan?

A level funded plan is a hybrid between fully insured and self-funded coverage. You pay a predictable monthly amount that includes admin costs, stop-loss protection, and claims funding, with greater transparency than fully insured plans.

Who is level funding best for?

Most often, mid-market employers with roughly 50 or more employees who want more control, better data, and potential savings, without being responsible for claims overruns in a bad year.

Can a level funded plan really save money?

It can, when the group is a strong underwriting fit and leadership uses the transparency to manage plan performance. Many employers also like the potential for a refund when claims run below expected.

What happens if claims are higher than expected?

In many level funded arrangements, the carrier assumes the risk above expected claims, so the employer is not required to pay the overrun. Exact terms vary by carrier and contract.

Is level funding the same as self-funding?

Not exactly. Level funding operates like a self-funded plan in transparency and structure, but it typically includes carrier protection that limits the employer’s downside exposure.

Is level funding a good fit for small companies under 50 employees?

Usually not. Smaller groups often do not have enough scale for predictable claims performance and underwriting stability.

Why do some employers avoid switching if they are on Kaiser?

Moving away from a Kaiser-heavy enrollment can be disruptive for employees, and plan design options may change. It is workable, but it requires a thoughtful transition strategy.

What is the first step to see if level funding fits?

A plan review using current enrollment, claims experience, and renewal data. From there, the market can be tested against level funded options with clear side-by-side comparisons.

Level Funded Plans for Mid Market Companies – A Solution That Makes Sense

Level funding is designed for employers who want to limit annual renewal increases, protect employee benefits that the employees actually care about, and engage in health benefits as a managed long term strategy.

If you want a clear answer on whether level funding fits your company, request a level funding feasibility review based on your current plan, enrollment, and claims profile.

Brian Alexander
Founder | President, Parker Insurance
866-779-5600
info@parkerinsurancesd.com
2145 Newcastle Ave., Cardiff, CA 92007

Employee Benefits Health Trends for 2026

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How mid-market employers can contain spend, reduce risk, and keep benefits competitive

Mid-market employers are walking a tightrope. Renewal increases keep coming, employees are more cost sensitive than ever, and the wrong move, like higher deductibles or thinner networks, can turn into turnover.

Industry data backs up what employers are experiencing. Medical trend rates are projected to remain elevated through 2026, with a double-digit trend in most markets and continued pressure from higher utilization, chronic conditions, and more advanced, higher-cost treatments.

The question is not whether costs will rise. The question is whether your plan strategy is built to absorb that pressure without pushing the burden onto employees.

This article breaks down the levers that actually work for mid-market employers, especially those in automotive, manufacturing and distribution, and professional services, that need a smarter cost containment strategy that still supports retention.

Why health plan costs keep rising

Most employers only see the renewal number. Underneath it, several compounding forces are driving cost growth.

Utilization increases tied to an aging population and the growing prevalence of chronic conditions, care delivery disruptions tied to staffing shortages, and higher-cost treatments such as advanced cancer therapies. That combination is exactly why “do nothing and shop at renewal” is no longer a strategy.

The retention problem with “cost shifting”

When employers feel cornered, the most common response is cost shifting, raising deductibles, increasing employee contributions, restricting eligibility, or tightening coverage.

The report calls out the long-term downside clearly. Short-term budget relief can create deeper problems, reduced access to care, worsening health outcomes, higher future claims, and a weaker employee experience that affects attraction and retention.

Mid-market companies feel this faster than large enterprises because every resignation carries more operational impact and recruiting leverage is tighter.

The smarter path is to contain costs by improving how the plan is financed, how care is used, and how risk is managed.

Cost containment lever 1: Rethink how your plan is funded

If you are fully insured, you are paying for risk transfer plus carrier margin, and you are often getting limited transparency into what is driving claims.

Alternative funding models are a meaningful way to gain flexibility, transparency, and potential savings, while noting they require the right fit and a disciplined approach to utilization and care management.

For mid-market employers, these three models can bring measurable and lasting value.

Level-funded plans

Level funding is a hybrid, predictable monthly payments like fully insured, paired with claims funding and stop-loss protection. When claims run favorably, some structures can include premium refunds or profit sharing.

Why it works for mid-market employers:

  • Predictable cash flow with a clearer line of sight into claims drivers
  • Better data access for targeted interventions
  • A financing structure that rewards disciplined utilization management

Self-funded plans with stop-loss

Self-insurance allows employers to pay claims directly, with stop-loss insurance in place to limit large, unexpected costs.

Why it works:

  • Maximum transparency and control over plan design and vendor strategy
  • Ability to target your highest-cost drivers instead of accepting broad pooled pricing
  • More opportunities to implement value-based programs that a fully insured carrier may not prioritize

Captive Solutions

Captives allow companies to manage risk centrally and keep more of the underwriting profits, and cell captives can be an entry point for employers that want a simpler start.

Why it works:

  • Turns risk financing into a strategic asset instead of a fixed expense
  • Creates stronger incentives to manage claims and improve workforce health
  • Can stabilize long-term costs when paired with real risk management, not just plan design changes

Important note: Alternative funding is not a magic trick. It only performs when paired with cost controls, claims governance, and proactive risk reduction. The report is direct on this point, employers need to evaluate administrative complexity, regulatory considerations, and utilization and care management strategies as part of any alternative funding decision.

Cost containment lever 2: Eliminate waste, fix the “leaks,” and enforce plan integrity

One of the most actionable insights in the report is how strongly insurers are concerned about waste.

76% of insurers are concerned about inefficient and wasteful care making plans unaffordable over the next three years.

Waste shows up in multiple forms, including unnecessary diagnostics, low-value care, administrative errors, and inefficient site of care choices.

For a mid-market employer, this is good news because waste is one of the most controllable categories, if you have the right visibility and partners.

Practical employer actions that directly support cost containment, including:

  • Eligibility audits to ensure only eligible employees and dependents are enrolled
  • Pre-authorization protocols that limit low-value treatments and encourage cost-effective care
  • Clear care pathways for certain conditions to reduce duplication and improve coordination
  • Bundled procedure pricing to reduce variability and improve predictability
  • Ongoing plan performance monitoring and post-claim audits to identify anomalies and billing errors
     

This is the operational side of cost containment, not just plan design.

Cost containment lever 3: High-cost claims management, built before claims happen

Most mid-market employers eventually learn this lesson the hard way, a small number of complex claims can distort your renewal and your long-term trend.

The report notes that high-cost claimant management is the number one intervention insurers plan to deploy or enhance in the next two years, and more than two-thirds identify high-cost claimants as a key focus.

The most cost-effective strategy is preventing high-cost claims from escalating.

Emphasize prevention and early detection programs such as vaccinations, cancer screenings, and routine health checks, and the importance of enabling employees to access preventive care, including time off for appointments.

For employers with an aging workforce, the report reinforces that targeted benefits and preventive care help keep experienced employees healthy, engaged, and productive, which directly supports retention and reduces future costs.

Where this becomes real for mid-market employers is governance. The report highlights the growing frequency of members reaching lifetime limits, and the risk of ad hoc exceptions that create uneven financial exposure.

A proactive broker partner helps you define how high-cost claims are managed, how exceptions are handled, and how resources like navigation and case management are activated early.

Risk reduction: Build a healthier workforce to protect your plan

Cost containment is not only about negotiating premiums. It is also about lowering risk.

Identify the top health risk factors driving medical costs globally, metabolic and cardiovascular risk, mental health risk, psychosocial risk, tobacco smoke, and occupational risk.

Two of those categories matter intensely to mid-market employers in operational industries: occupational risk and musculoskeletal conditions.

The report notes that musculoskeletal conditions have become one of the top causes of claims by frequency, linked to factors like sedentary work, obesity, and poor workplace ergonomics.


It also outlines workplace-oriented supports that reduce MSK-driven claims, including early assessment and triage, physical therapy, return-to-work planning, ergonomics improvements, and safety and manual handling training.

For employers, the takeaway is simple. If your workforce is aging, lifting, driving, standing, working long hours, or sitting at desks all day, risk reduction is a benefits strategy, not an HR wellness initiative.

The retention link: Benefits that meet needs drive performance

Employers often treat benefits as a cost center, employees experience them as proof of whether the company values them.

When employees have benefits that meet their needs, 79% say they are thriving in their role, compared to 30% when benefits do not meet their needs. Similarly, 84% report being physically and mentally well when benefits meet needs, compared to 55% when they do not.

This is where cost containment and retention stop being competing priorities. If you manage costs by improving plan performance and closing the right gaps, you protect the business and the employee experience at the same time.

Why a broker partner matters more than ever

A broker who “shows up at renewal” cannot execute this kind of strategy. The work is year-round, operational, and data-driven.

A key driver of perceived employer care, communication quality. Employees who say their benefits communications are engaging are dramatically more likely to understand the value of benefits and to say, my employer cares about my health and wellbeing. That is not a soft metric. It directly impacts utilization (using the plan correctly), satisfaction, and retention.

At Parker, this is where we focus:

  • Plan financing strategy that fits your risk tolerance, level-funded, self-funded, and captive options
  • Cost containment that targets waste, high-cost claims, and site-of-care behavior
  • Workforce risk reduction programs tied to real claim drivers, MSK, chronic conditions, mental health, occupational risk
  • Employee navigation and communication that makes benefits usable, not confusing
  • Ongoing governance so the plan performs consistently, not just on paper

What to do next

If your renewal strategy has been limited to shopping carriers and raising employee contributions, you are not alone, but you are also leaving the most effective levers untouched.

A mid-market benefits strategy that works in 2026 does three things:

  1. Uses smarter funding, level-funded, self-funded, or captive, to gain control and transparency
     
  2. Attacks waste and claim volatility with disciplined plan integrity, navigation, and high-cost claim management
     
  3. Reduces risk by investing in prevention, early intervention, and workplace initiatives that lower the frequency of high-cost claims
     

If you want to evaluate whether alternative funding is a fit for your organization, and what cost containment initiatives will actually move your renewal, Parker can map the options, quantify the tradeoffs, and build a plan that supports retention while controlling spend.

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Surprise Billing Model Notice

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Surprise medical bills, also called balance billing, have been a major concern for employees and employers alike. The federal No Surprises Act (NSA), which took effect in 2022, created important protections for patients and requirements for health plans. These protections remain in place in 2026, and there have been updates around how the law is enforced and how disputes are resolved.

This article will walk you through what balance billing is, what the law requires, recent developments, and what employers need to know to stay compliant.

What Is Balance Billing?

When you visit a doctor or facility that is not in your health plan’s network, you may be billed for the difference between what your plan pays and what the provider charges. This is called balance billing.

Balance billing often leads to surprise medical bills when:

  • You need emergency care and cannot choose who treats you.
  • You visit an in-network facility but unknowingly receive care from an out-of-network provider.

These charges can be significantly higher than in-network costs and may not count toward a patient’s annual out-of-pocket maximum.

What the No Surprises Act Protects You From

Since January 1, 2022, patients are protected from balance billing in several key situations:

Emergency Services

  • If you have an emergency medical condition and are treated at an out-of-network hospital or emergency department, you cannot be charged more than your in-network cost-sharing amount (copay, coinsurance, deductible).
  • This protection continues after you are stabilized, unless you consent in writing to out-of-network costs.

Certain Services at In-Network Facilities

  • At an in-network hospital or ambulatory surgical center, some providers may still be out-of-network (for example, anesthesiologists, radiologists, pathologists, or assistant surgeons).
  • In these cases, you can only be charged your in-network cost-sharing amount.
  • You are never required to waive your protections or agree to be balance billed.

Compliance Requirements for Employers and Plan Sponsors

Employers that sponsor group health plans must comply with the disclosure rules under the No Surprises Act. These include:

  • Making information about surprise billing protections publicly available on a website.
  • Including disclosure language on explanations of benefits (EOBs).
  • Using plain language and ensuring accessibility for individuals with limited English proficiency or disabilities.
  • Following federal civil rights laws requiring meaningful access and nondiscrimination.

Failure to comply can expose plan sponsors to penalties and create employee confusion.

Updates to the No Surprises Act Since 2022

While the core patient protections have not changed, there have been important updates:

Independent Dispute Resolution (IDR)

The IDR process allows providers and insurers to resolve disputes over out-of-network payment amounts. Since 2022, the process has been refined and litigated:

  • More certified IDR entities have been added to handle growing demand.
  • Courts, including the Fifth Circuit in 2025, have reviewed aspects of the process, leading to further regulatory guidance.
  • Delays in insurers honoring IDR decisions have prompted proposed legislation to impose penalties for noncompliance.

Legislative Proposals

Lawmakers introduced the No Surprises Act Enforcement Act in 2025 to strengthen enforcement against insurers that fail to pay after IDR decisions. While not yet law, it signals increasing oversight of compliance.

Provider and Plan Behavior

Data shows some providers, including those backed by private equity, are frequently using arbitration, which may increase costs. Policymakers continue to monitor whether the Act is meeting its goal of reducing surprise bills without driving up healthcare expenses.

What Employers Should Do Now

Employers and HR leaders should take steps to remain compliant and support their employees:

  • Review disclosures: Ensure the required information is posted publicly and included in EOBs.
  • Update communications: Use plain language and confirm accessibility for all employees.
  • Monitor compliance partners: Verify that your carrier or third-party administrator is following the latest NSA requirements.
  • Stay informed: Watch for regulatory updates and potential new enforcement rules.

How Parker Insurance Helps

At Parker Insurance, we help mid-market companies simplify compliance and protect both their workforce and their bottom line. Our team stays current on regulatory changes like the No Surprises Act and provides proactive guidance so you can focus on running your business with confidence.

If you have questions about compliance or want to ensure your employee benefits program meets federal requirements, we are here to help.

Contact Us Today.

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Get To Know Telemedicine

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What is it?

Telemedicine is a form of technology-based communication that allows a doctor and patient to communicate without being in the same physical space.

How does it work?

Through the use of technology, communication is facilitated either in a real-time or delayed setting. Usually a patient is able to communicate from his or her home with a doctor through a live video, audio or patient data transfer system. Doctors can see the patient and assess his or her symptoms, as well as obtain the patient’s records and medical history from electronic medical records.

Is telemedicine a substitute for in-person doctor’s visits?

No. A virtual appointment is good for a number of mild conditions, but is not suitable for severe symptoms like a high fever or a debilitating cough. Additionally, you should NOT use a virtual appointment to seek treatment for situations like a chronic condition, complex conditions, life-threatening conditions, anything requiring a test or hands-on exam, or broken bones, sprains, or other serious injuries.

Want more information? Please see your HR for more information on telemedicine offerings.