Modern Employer Health Benefits Demand Active Management As Traditional Tactics Fail

Carrier loyalty, periodic shopping, and annual enrollment cycles no longer protect employers from cost volatility or access breakdowns. With employer-sponsored health insurance expected to exceed $18,500 per employee and premiums climbing at double the rate of inflation, the tactics that sustained most benefits strategies for the past two decades are failing. Major policy changes compounding in 2026 are only accelerating the pressure. For employers still treating benefits as a delegated function, the financial exposure is compounding.

Steven Litzsinger is the Founder of IAG, a healthcare advisory firm focused on employee benefits strategy, health insurance, and care delivery. A former Vice President at UnitedHealth Group with more than 25 years of experience across payor and provider settings, Litzsinger advises employers on building benefits strategies that are measurable, flexible, and actively managed.

“If you’re not looking at your benefits strategy and actively managing it, that can become a costly mistake that affects not just profitability, but viability.” Litzsinger says the breakdown starts at the carrier level, where even decades-long relationships no longer guarantee continuity.

• Locked out at renewal: “Even with some of our clients that have been with the same carrier for twenty years, they are not being allowed to stay within the same carrier in another product line due to medical loss ratios,” Litzsinger says. “I have never seen that before.”

• The check-mark trap: Employers have pushed high-deductible health plans and HSA contributions as far as they can. Litzsinger argues many of these tools no longer deliver real value. “It’s nothing more than a check mark for the employer because it’s really not adding value if they can’t afford or know how to access those benefits.”

That disconnect carries a retention cost. Employee anxiety around healthcare costs is at record highs, and workers are increasingly willing to change jobs for better benefits, even at the same or lower pay. When benefits drive talent decisions, a strategy built on annual enrollment and occasional carrier shopping becomes a competitive liability. Meanwhile, narrowing provider networks are creating access problems that further erode the perceived value of employer-sponsored coverage.

• From passive to active: A comprehensive assessment and gap analysis across the full benefits strategy is now a baseline requirement, and it can’t sit with a single benefits manager. “That whole executive team has to be part of the process, starting to demand transparency and a higher return on that investment,” Litzsinger says. The stakes go beyond cost. Employers that fail to document and govern their benefits decisions face growing compliance exposure under ERISA.

• One size doesn’t fit: A multigenerational workforce spread across multiple states can’t be served by a single plan design. “Just because the best option at your headquarters is Blue Cross Blue Shield of South Carolina does not mean that’s true for an employee in Alabama.” Designing for geographic and demographic variation is now essential.

• Shared risk, real results: Litzsinger highlights health membership programs starting at $10 per employee per month that offer quality telehealth, prescription access, and care navigation. Unlike standard telehealth add-ons, these vendors share financial risk with the employer. “When there is shared risk among all parties, you’re going to be able to influence and drive performance and, more importantly, drive outcomes.”

With pharmacy costs among the highest expense drivers and federal regulators proposing new PBM transparency rules, bundling complementary programs alongside core benefits is becoming a practical cost-control lever. Models like ICHRA add flexibility by shifting risk to a larger pool, giving employers more predictable costs while employees gain individualized coverage options. But choosing the right administrator matters as much as the model itself.

• Flying blind on self-funding: Litzsinger describes a prospective client that moved to a self-funded plan without understanding the claims cycle. Less than a year in, they couldn’t quantify how much they had spent against their reserves. “That’s alarming. That’s scary. That is not a way to do business.” The case echoes broader warnings about the fiduciary and financial risks that small and mid-sized employers take on when they self-insure without adequate oversight.

The path forward comes down to three things: finding a strategic partner who conducts a thorough assessment of the employee population, building a measurable strategy in genuine partnership with the employer, and committing to continuous management rather than quarterly check-ins. For employers still running benefits on autopilot, the margin for passive oversight has disappeared. “It’s not a set and done. It’s a continuous management process.”