If your company’s last employee benefits renewal involved choosing the option that sucks the least, you’re not alone. While the Peterson-KFF Health System Tracker reports that small group insurers proposed an average premium increase of 11% for the 2026 plan year, many employers experienced increases that were much steeper than that.
Even if you were one of the “lucky” companies paying just 11% more, you’re having to dedicate a greater percentage of your operating budget toward employee benefits.
Employer-sponsored coverage is the largest source of benefits for the under-65 U.S. population. However, as health plan costs rise, many small companies simply can’t afford to continue offering benefits. According to JPMorganChase, nearly one-third of small businesses drop health insurance coverage from one year to the next.
An Unsustainable Situation for Members Too
While premium increases are tough for businesses, the out-of-pocket costs are also painful for plan members. A Gallup poll found that:
- 47% of U.S. adults are worried that they won’t be able to afford necessary care in 2026
- 30% say they have skipped a medical procedure, test, or evaluation that a doctor recommended due to cost in the last three months
- 20% say they or someone in their household has been unable to pay for prescribed medications.
Health insurance is a critical part of total compensation, and as health insurance costs rise, while plan benefits get leaner, employee satisfaction may plummet. Some of your best people may be looking for new work because they simply can’t afford not to.
A New Model: No Carrier Required
The health insurance situation is not sustainable for anyone, and it seems like there are no options. But, here at Health2Business (H2B), we have built a new healthcare model that’s working very well for many employers in several states.
Our proven model is known as a Direct Community Health Plan.
It’s a way to own your health plan instead of renting it – and to provide your team with benefits that make you proud, by delivering real, affordable value.
The biggest difference with a Direct Plan is that there is no carrier serving as a middleman, collecting your premiums and paying the claims. You’re engaged in a contract with your provider that determines how much medical services will cost. Your costs are well planned and budgeted and you’re protected by Stop Loss insurance to control your financial exposures. There are provisions included for treating with other providers – much like an In Network vs. Out of Network arrangement.
Here’s the astonishing part:
When employers use H2B to switch to the direct plan model, they typically save 10% to 30% in the first year, and their annual renewal increases average 1-2%. This creates immediate savings as well as predictability and reliability year after year – all while providing high-quality benefits.
Employers with as few as 10 employees can be a good fit for the direct plan model. As with anything new, you will have to learn a few new processes, but with H2B as your partner and coordinator, it’s much easier than you might expect.
Best of all, you’re in the driver’s seat. If your plan performs better than intended, you can repatriate funds saved to pay for even richer benefits the next year. You can also focus on the kind of benefits that matter most to your employee population.
The Provider’s Perspective
Most of us don’t stop to consider the provider perspective, but the truth is that most healthcare providers don’t really like insurance either. It hobbles them with restrictions, red tape and paperwork that takes time away from their core mission of care.
When employers contract directly with providers, great things happen. Providers go out of their way to provide worksite clinics and employee resources and they enjoy a straight-forward claims process with prompt payment. Employers that use the Direct Community Health Plan model say that their employees feel like VIPs because their providers prioritize their team’s needs.
What About Brokers?
Trusted advisors love collaborating with H2B because we enable them to bring innovative and sustainable options to their clients. There’s a little more leg work involved with these arrangements, but brokers can also earn more with a generous compensation model built into the plan contract.
For “hands off” brokers who prefer to see clients once a year at renewal, this probably isn’t the best choice.
A Smarter Path Forward
If you do the same thing over and over, you can’t expect a different result. Unfortunately, that’s what most of the employee benefits industry is doing right now. It’s an insane process. If you see the value of trying something new, now is the time to act. It usually takes around 90 to 180 days to implement a Direct Community Health Plan. You don’t have to wait for the traditional January 1 timing – you can convert to this new model any time of the year.
The sooner you start exploring your options, the sooner you can find a solution that provides meaningful improvement for you and your team. Contact me to learn more.
