What Would $500,000 Mean for Your Company?
Many employers don’t realize how much bad benefits quietly drain from their business.
When Wada Farms switched to a direct health plan, the company saved nearly $500,000 over four years. For a family-owned business, this savings was huge. It represented meaningful capital that could be reinvested into operations, employees and growth.
Their results aren’t unique. Employers that switch to direct health plans tend to save an average of 24% in the first year, with renewal increases of just 1.9% on average.
If your benefits strategy is absorbing resources without delivering measurable value, it’s worth asking: What could your company do with an extra $500,000?
Real Savings Are Within Reach
This isn’t like dreaming about winning the lottery, it’s a possibility that’s within your reach, right now. With direct health plans, employers can bypass insurance carriers and contract directly with local health providers. And it’s not just an option for large corporations. Small and medium-sized businesses are using this model right now to cut their costs while gaining control over their benefits.
Admittedly, it’s a big change. Employers that use a direct health partnership need to take responsibility for their coverage. There are ways to manage risk, but there’s also a lot to learn, and it takes some effort to get everything in place. But once you do, you can start to see real rewards.
How Could You Reinvest Your Savings?
Many businesses would welcome some extra cash right now. Rising healthcare and insurance costs aren’t the only issue. Inflation, tariffs and other economic factors are also putting pressure on budgets. The Federal Reserve Bank of Minneapolis surveyed 731 business owners and found that half reported declining revenue and profits. Times are hard.
Employers are understandably looking for ways to save on employee benefits. Wada Farms saved around half a million in just four years, and that was with about 235 employees on the plan and 500 lives covered. Of course, your exact savings will depend on your situation. Your savings could be more or less, but they’ll likely be substantial.
If your company could save $500,000 over the next four years, how could you use that savings? Here are just a few ideas:
- Reinvest the savings to provide even better employee benefits and boost worker retention and recruitment.
- Increase reserves to protect against unforeseen losses, such as natural disasters or cyberattacks.
- Support business expansion and growth by increasing your workforce.
- Invest in better equipment or technology.
- Hire more talent.
How Much Are Lousy Benefits Costing You?
If you’re spending a lot of money on “great” benefits, at least you’re keeping your employees happy. Unfortunately, that’s not usually happening. In reality, many employers are spending more and more on benefits with ridiculous deductibles, cost-prohibitive copays and restrictive terms that can make coverage pretty much useless.
This isn’t just a waste of money. It’s a talent killer.
Most working-aged Americans depend on employer-sponsored benefits for health coverage. Although it’s possible to buy health insurance on the ACA Marketplace if your employer doesn’t offer coverage, doing so isn’t always a good option, especially now that enhanced tax credits have expired. CNBC says 90% of ACA marketplace enrollees received enhanced premium tax credits in 2025, and the average recipient saw their premiums more than double due to the expiration.
For many people, work benefits are the only practical coverage option. According to Talker News, one in three workers would turn down a dream job if it didn’t come with good health insurance coverage, and 42% would switch jobs for better coverage.
For employers, the harsh reality is that you aren’t going to attract top talent without top benefits. If you’re offering inferior benefits, you’re sabotaging your hiring strategies, and that can hurt your company’s long-term viability.
With a direct plan, you’re in charge of your health benefits, so you can shape them to fit the needs of your workforce. Want a low deductible? Go ahead. Want to provide generous coverage for pregnancy and delivery? Great idea.
When Northwest Real Estate Capital Corp. switched to a direct plan, the employee deductible shrank by $2,000. That’s like giving your employees a $2,000 raise.
Every Year You Wait Is a Year Lost
The current healthcare system simply isn’t working for most employers or their employees. Companies continue to put up with it because they’re afraid to jump into the unknown and try something completely different.
But how long can this continue?
Price surges can’t go on forever. At some point, the cost of health insurance will become unsustainable, and at this rate, it will happen sooner rather than later. Why go down with the ship? The sooner you leave, the sooner you can start reaping the rewards of lower costs and better benefits.
A direct partnership isn’t a good fit for every company, but many small and medium-sized business owners are surprised to learn that it can work for them. Learn more about the employers we serve.
