Marty Levy

Today’s workforce is no longer one-size-fits-all, but many small businesses still feel forced into offering one-size-fits-all health benefits.

Small businesses face a familiar dilemma. Rising healthcare costs demand predictability, while increasingly diverse employee needs demand greater choice.

With employees working across different locations and navigating different healthcare needs, family situations, doctors, prescriptions, and provider networks, a single health plan may not work equally well for everyone.

Research commissioned by Justworks and conducted with The Harris Poll examines how small business decision-makers and employees view health benefits. The findings reveal a growing disconnect between what employers want to provide and what employees expect from their coverage.

For growing businesses competing against larger organizations for talent, benefits flexibility is becoming more than an HR preference. It is increasingly connected to recruitment, retention, and the overall employee experience.

Key Findings

Small businesses are not struggling because they do not care about employee benefits. Many are struggling to find coverage options that fit modern teams while remaining financially and operationally manageable.

Key findings from the report include:

• Half of small business decision-makers are concerned about how their current benefits may affect hiring and retention.
• Among those concerned about talent, eighty percent say it is difficult to find a health benefits solution that works for employees with different needs.
• Ninety-six percent of talent-concerned decision-makers say offering employees more choice in their health coverage is important.
• Eighty-nine percent of small business decision-makers say providing employees with more healthcare choice is important.
• Eighty-six percent of employees say flexibility in choosing their health insurance provider matters when evaluating a job offer.
• Eighty-seven percent of employees would consider working for a small business that provides a monthly reimbursement so they can select their own health insurance coverage.

The Growing “Bene-Fit” Gap

For years, conversations about employee benefits centered on one primary question:

Can the business afford to offer health insurance?

That question still matters. Cost and affordability remain the biggest health benefits challenge for many small businesses, with thirty-four percent of decision-makers identifying it as their leading concern.

However, employers are now facing a second question:

Even when we offer health insurance, does it work for everyone on the team?

According to the research, fifty-two percent of small business decision-makers worry at least quarterly that their current health benefits may not fully meet their employees’ needs.

That concern is even higher among businesses with twenty-five to ninety-nine employees.

Nearly half of small businesses are also concerned that their current benefits offering could make it harder to recruit or retain employees. Only fifty-five percent believe that a single employer-provided health plan can realistically meet the needs of everyone on their team.

Employees are expressing similar concerns from the other side of the hiring process.

Eighty-six percent say the ability to choose their health insurance provider is important when evaluating a job offer. Eighty-seven percent would consider joining a company that offered a monthly reimbursement to help them select coverage based on their own doctors, prescriptions, networks, and healthcare needs.

This disconnect is what the report describes as the “Bene-Fit” Gap: the difference between what employers want to provide and what employees need from their benefits.

Benefits Flexibility Is Becoming a Talent Gap

Growing companies have always competed for qualified employees. What has changed is what employees expect from the companies they join.

Nearly half of small business decision-makers are concerned that their benefits offering could make hiring or retaining talent more difficult.

Among this group:

• Eighty percent say it is difficult to find a benefits solution that works across different healthcare needs, family situations, and employee locations.
• Ninety-six percent say offering employees more choice in their health coverage is important.
• Forty-two percent say rising healthcare costs are causing them to reconsider how they provide benefits.

The problem is not a lack of employer concern.

Many business leaders recognize the importance of competitive benefits but may not feel they have enough tools, information, or coverage models available to address the different needs within their workforce.

Employees Want Benefits That Fit Their Lives

Employees are increasingly evaluating benefits based on how well the coverage fits their personal circumstances.

Among small business decision-makers:

• Eighty-nine percent say offering employees more choice is very or somewhat important.
• Fifty-nine percent say finding a solution that works for different employee needs is difficult.
• Forty-four percent say having more plan choices would make them more likely to offer or improve employee benefits.
• Twenty-seven percent say the greatest advantage of having access to multiple coverage models is being able to find the right fit for a diverse workforce.

When an Individual Coverage Health Reimbursement Arrangement, or ICHRA, was described to employees, the most appealing features included flexibility and the ability to choose coverage based on individual doctors, networks, and prescriptions.

An ICHRA allows an employer to provide a defined amount of money that eligible employees can use to purchase their own individual health insurance coverage.

Thirty-six percent of surveyed employees valued the ability to use remaining eligible funds toward healthcare expenses such as therapy or contact lenses. Thirty-three percent valued having greater choice based on their doctors, provider networks, and prescription needs.

The findings do not suggest that traditional group plans are no longer valuable.

Traditional employer-sponsored coverage remains an effective solution for many organizations. However, the data indicates that employees and employers are increasingly open to different approaches when a single group plan does not adequately serve the entire workforce.

Personalization Is Becoming an Employee Expectation

Employees are not necessarily rejecting employer-sponsored health benefits. Instead, many are looking for greater control over how those benefits are structured.

When asked how they would prefer employer-provided health benefits to work:

• Thirty-three percent were open to either an employer-selected plan or an employer-funded individual model, depending on quality and cost.
• Twenty-nine percent preferred an employer-selected plan or set of plans.
• Twenty-seven percent preferred receiving a set monthly amount to choose their own coverage.

This suggests that there is no single model that works for every employee or every business.

Some employees may prefer the simplicity of a traditional group plan. Others may place greater value on selecting coverage that includes their preferred doctors, medications, and provider networks.

The most effective benefits strategy may depend on the organization’s workforce, location, budget, participation levels, and long-term business objectives.

What Employers Should Consider

The research points to a broader shift in how small businesses may need to approach employee benefits.

Workers want more choice. Employers want to provide meaningful coverage. The challenge is finding a structure that balances flexibility, affordability, compliance, and administrative responsibility.

Before making changes, employers should evaluate:

• Whether the current plan is meeting employee needs
• How employees are distributed geographically
• Whether employees are using different doctors, provider networks, and prescriptions
• The predictability of the company’s healthcare spending
• Employee participation and eligibility requirements
• The administrative responsibilities associated with each benefits model
• How benefits affect recruitment and employee retention

The goal is not necessarily to replace traditional group coverage.

The goal is to understand whether the current strategy remains the most appropriate fit for the business and its employees.

CorpStrat Insight

The growing demand for benefits flexibility does not mean every company should immediately move away from traditional group insurance.

It means employers should stop assuming that one benefits structure will automatically serve every workforce.

Traditional group plans, level-funded arrangements, defined-contribution strategies, and individual coverage reimbursement models can each serve different business needs. The right approach depends on the company’s size, employee demographics, locations, budget, risk tolerance, and long-term hiring strategy.

Employers should also be careful not to evaluate health benefits based only on the annual renewal increase.

A plan that appears affordable but does not meet employee needs may create hidden costs through low participation, employee dissatisfaction, recruitment challenges, and turnover.

At the same time, providing more choice without a clear strategy can create confusion and additional administrative responsibility.

The strongest benefits strategy is not necessarily the plan with the lowest initial price or the greatest number of options. It is the one that creates the right balance between cost control, employee choice, plan quality, and operational simplicity.

CorpStrat helps employers evaluate these tradeoffs, compare available funding and coverage models, and build a benefits strategy aligned with both workforce needs and business objectives.

Source

This article references research published by Justworks in “The Small Business ‘Bene-Fit’ Gap Report,” dated July 9, 2026. The research was commissioned by Justworks and conducted with The Harris Poll.

Reference: Justworks, The Small Business “Bene-Fit” Gap Report.

And you may not need to switch insurance companies to take advantage.

By Marty Levy, CLU, RHU  |  CorpStrat Insurance & Employee Benefits

If you run a small or mid-sized business in California, you already know the annual ritual: your group health insurance renewal comes in, the premium increase makes your stomach drop, and you scramble to figure out what to cut — richer benefits, fewer employees covered, or just take the hit to your budget.

There’s a newer option that more California employers are turning to, and it’s worth understanding: level funded health plans. Major carriers including Anthem Blue Cross and UnitedHealthcare now offer these plans — and here’s the part most employers don’t realize — you may be able to access one without leaving your current insurance company.

So, What Exactly Is a Level Funded Plan?

Think of it as a smarter middle ground between two traditional options most employers already know:

• Fully insured plans — you pay a fixed monthly premium no matter what. Simple, but expensive. The insurance company keeps the profit if your group has a healthy year.
• Self-funded plans — the employer pays claims directly as they come in. More control and potential savings, but real exposure if your employees have a bad health year.

A level funded plan works like this: you pay a fixed, predictable monthly amount — just like a traditional plan. That payment covers your employees’ claims, stop-loss insurance (which protects you if claims run unusually high), and administration fees. At the end of the year, if your group’s actual claims came in lower than what you paid in, you get a refund of the difference. If claims ran higher, the stop-loss coverage kicks in — so your worst-case scenario is capped.

In plain terms: you get the budget predictability of a traditional plan, with the upside of a self-funded plan. If your employees stay healthy, money comes back to you — not to the insurance company.

Who Is This Really For?

Level funded plans are generally the best fit for:

• Employers with roughly 10 to 150 employees
• Companies whose workforce tends to be younger and relatively healthy
• Business owners who are frustrated watching premiums climb every year with nothing to show for it
• Organizations willing to look at some basic claims data to make a smarter decision

They’re not for every group. If your claims history is high or your employee population carries significant health risk, a fully insured plan may still be the right call. That’s exactly why it takes a real analysis — not just a quote — to evaluate whether this approach makes sense for your specific situation.

Anthem and UnitedHealthcare Are Already There

One of the biggest misconceptions I hear from employers is that level funded plans are only available from obscure or unfamiliar carriers. That’s no longer true. Anthem Blue Cross and UnitedHealthcare — two of the most recognized names in the business — now offer level funded products in California.

What that means practically is significant: your employees may be able to stay in the same network they’re already using, keep their current doctors and hospitals, and maintain continuity of care — while your business transitions to a structure that gives you a shot at real savings.

You don’t have to blow up what’s working. In many cases, the carrier stays the same. What changes is the financial structure behind the plan — and who benefits when your group has a good year.

The Real Advantage: Transparency

Traditional fully insured plans are essentially a black box. You write a check every month and never really know how your claims compare to your premium. Level funded plans flip that. You get actual claims data — what your employees used, what it cost, how your group performed. That information is powerful. It helps you make smarter decisions about benefits design, wellness programs, and year-over-year planning.

For employers who’ve felt like passive passengers on the health insurance train, that transparency is often one of the most valued aspects of switching.

How to Explore This — Without Going It Alone

Level funded plans aren’t complicated to run, but they do require more upfront analysis than a standard renewal. Here’s what the process looks like when we work through it together:

• We pull your current census data and review your claims history (usually the last 12–24 months).
• We run a comparison across carriers — including Anthem and UnitedHealthcare — to see which level funded structure pencils out best for your group.
• We walk through the stop-loss parameters so you understand exactly what your worst-case exposure looks like.
• We compare it side-by-side against your current fully insured renewal so the decision is apples-to-apples.

This isn’t a sales pitch — it’s an analysis. Some groups are a great fit. Others aren’t ready yet. Either way, you walk away with better information than you had before.

Ready to See If This Makes Sense for Your Business?

If you’re a California employer and you’ve never had a real conversation about level funded options, now is a good time to start — ideally before your next renewal cycle creeps up.

Reach out to me directly and we’ll take a look at your situation together. No pressure, no jargon — just a straightforward review of whether this approach could save you money and give you more control over one of your biggest operating expenses.

For years, employers have been told the same story:

Healthcare costs are rising. Premiums are increasing. There’s not much anyone can do.

And so, year after year, many businesses have done what felt reasonable: absorb part of the increase, raise employee contributions a bit, adjust deductibles, increase copays, and move forward.

But something important has changed.

Employees are beginning to feel that although their benefits technically still exist, they are getting less value from them.

That’s because healthcare costs haven’t disappeared — they’ve simply shifted.

The New Reality: Cost Sharing Has Become Cost Transferring

Employers are still spending significant dollars on employee benefits. In many cases, six or seven figures annually.

But employees often experience something very different:

• Higher payroll deductions
• Larger deductibles
• Bigger out-of-pocket maximums
• More narrow provider networks
• More prior authorizations
• Greater prescription complexity

From an employee’s perspective, it can feel like paying more for less.

And when employees don’t understand what their employer is contributing, benefits stop feeling like a benefit and start feeling like another bill.

Why This Matters More Than Employers Think

Most employers still view healthcare as an expense.

Employees increasingly view it as compensation.

That gap creates problems:

• Lower appreciation for employer investment
• More complaints during open enrollment
• Increased turnover risk
• Reduced employee satisfaction
• Greater pressure on wages

Ironically, many employers are spending more than ever while employees feel less supported than ever.

That’s not because employers are failing.

It’s because the way benefits are delivered and communicated hasn’t kept pace with reality.

The Companies Winning Right Now Aren’t Necessarily Spending More

The employers seeing stronger employee engagement aren’t always the ones buying richer plans.

They’re doing a few things differently:

1. They explain the value

Employees often have no idea what their employer actually pays.

2. They design intentionally

Not every increase should automatically become a higher deductible.

3. They communicate year-round

Benefits should not appear once a year during open enrollment.

4. They give employees tools

Decision support, enrollment assistance, videos, digital guides, and real people still matter.

5. They think beyond medical

Voluntary benefits, financial wellness, Medicare education, long-term care awareness, and protection planning all play a role.

A Better Question for Employers

Instead of asking:

“How do we reduce our healthcare spend?”

Try asking:

“How do we make employees feel more protected for every dollar we already spend?”

Healthcare costs may continue to rise.

But employers still have choices in how they structure, communicate, and maximize those dollars.

And sometimes the biggest opportunity isn’t lowering the cost.

It’s helping employees actually feel the value.

Let me ask you something personal. Not about money. Not about insurance. Just a simple question:

“If you needed help — real help, day-to-day care — would you want your kids dropping everything to provide it?”

Almost everyone answers the same way: No. Absolutely not. That is the last thing I would want.

And yet, most people have done nothing to prevent exactly that from happening.

That’s the conversation we want to have with you today. Not the one about statistics or premium rates or actuarial tables. The one about why we don’t plan for something we already know is coming.

The Word “Insurance” Is Ruining the Conversation

Here’s something to consider:  if long-term care planning were called anything other than insurance, everyone would want it.

Call it a Care Fund. A Longevity Guarantee. A Family Protection Account. Whatever you like — the moment people understand what it actually does, they’re in. The resistance isn’t to the concept. The resistance is to the word.

Insurance, as a category, carries baggage. We pay for car insurance and hope we never use it. We buy homeowner’s insurance and quietly resent the premium every year when the house doesn’t burn down. Insurance, in our minds, is a bet against ourselves. We pay in. We hope we lose.

Long-term care planning is fundamentally different — and I mean that in a structural, contractual, guaranteed way — but because it wears the same label, people tune it out before the conversation even starts.

The obstacle isn’t logic. It’s psychology.

Here’s the Reality Nobody Wants to Sit With

Almost nobody dies suddenly anymore. Modern medicine has gotten remarkably good at keeping us alive. What it hasn’t solved is what happens in the years — sometimes many years — before the end. Strokes leave people needing daily assistance. Dementia progresses slowly, and the person you love is still there but unable to manage alone. Falls, surgeries, chronic illness — they create care needs that don’t resolve in a few weeks.

Most of us will go through a period where we need meaningful help. It won’t be brief. And it won’t be free.

The question isn’t really IF you’ll need care. The question is who’s going to provide it — and what it’s going to cost them.

What “Family Handles It” Actually Looks Like

When there’s no plan, families step in. That sounds loving, because it is. But let’s be honest about what it means in practice.

It usually means a daughter — statistically it’s almost always a daughter — reducing her hours at work, or leaving her job entirely. It means her retirement savings slow down or stop. It means her marriage is under strain. It means her kids watch her sacrifice and wonder, quietly, if this is what’s coming for them too.

It means your son, who has his own family and his own demands, is suddenly navigating care facilities, insurance calls, and medication schedules between work meetings. It means family gatherings start to carry weight they were never supposed to carry.

None of this happens because anyone failed. It happens because there was no plan.

“I don’t want to be a burden” is the most common thing I hear. But it only matters if you act on it before it’s too late.”

So Why Don’t People Plan?

We’ve had hundreds of these conversations. The resistance almost always comes down to one of three things:

First, denial. It’s genuinely hard to picture yourself needing help getting dressed or remembering your grandchildren’s names. The future version of you who needs care doesn’t feel real yet. Planning for that person requires imagining something most of us actively avoid.

Second, avoidance. Dealing with insurance feels like a chore. It’s complicated. It requires paperwork, medical questions, and decisions you’d rather not make today. The path of least resistance is to put it off — and then put it off again.

Third, and this one is quieter: we associate needing care with the end of life, and we don’t want to go there mentally. Planning for long-term care feels like planning for decline, and nobody wants to spend an afternoon doing that.

But here’s what we want you to consider: the planning doesn’t make the decline more likely. It just means that if it happens, it doesn’t also become a financial and emotional catastrophe for everyone you love.

What the Planning Actually Does

When someone has a proper long-term care strategy in place, here’s what changes:

You get to choose where you receive care. Your home. A facility you actually like. Not whatever Medicaid will cover. That choice — and the dignity it represents — is what the planning buys.

Your children get to be your children, not your case managers. They show up because they love you, not because they have no other option.

Your savings stay intact. A serious care event without coverage can deplete a lifetime of savings in two or three years. With a plan, that doesn’t happen.

And here’s the part people don’t expect: with the right structure, you can’t lose. If you need care, the policy pays out. If you never need care, there’s a death benefit for your heirs. If you change your mind, you can walk away with your money back. Those are the three possible futures — and all three of them work out.

“You can’t lose” is not a sales pitch. With the right plan, it is literally the contract.

The One Catch

There is one thing that can take this option off the table permanently: your health.

Long-term care planning requires medical underwriting. If you’re healthy today, you qualify. If you wait until a diagnosis comes — and they always come eventually — the window closes. Not narrows. Closes.

This is the part I want you to take seriously. Not because we’re trying to create urgency artificially. But because I’ve had to have the harder conversation too many times — the one where someone calls me six months after they should have, and the opportunity is gone.

This Isn’t a Hard Conversation. It’s a 30-Minute One.

If anything here resonated — if you thought of a parent, or yourself, or a spouse — that’s the signal. Not to panic. Just to take the next step.

A conversation with us costs nothing. We ‘ll show you exactly what your exposure looks like in real numbers, and what a strategy would cost to fix it. No pressure. No commitment.

The only regret we ever hear in this business is from people who waited too long. You don’t have to be one of them.