The Employer Health Plan Landscape in 2026
If you’re an employer in 2026, you already know the pressure is rising. Health plan costs keep going up, renewals are unpredictable, and figuring out where your money actually goes? That’s harder than it should be.
In today’s tight labor market, simply offering coverage isn’t enough. Employers need plans that are sustainable, flexible, and support both their teams and their long-term goals.
More and more companies are realizing that traditional, one-size-fits-all insurance just doesn’t cut it anymore. They want more control. More visibility. More ways to build plans that reflect their people—not someone else’s average.
That’s where self-funded plans and transparent administration come in.
At Summit Administration Services, we partner with employers and consultants who want less red tape, more clarity, and smarter health plan strategies. Transparency, flexibility, and informed decisions are no longer the exception— they’re the expectation.
How Employer Health Plans Work: The Basics
Employer-sponsored health plans usually fall into one of two categories:
- Fully insured
- Self-funded
Let’s break down what each actually means.
Fully Insured Plans
This is the traditional model. The employer pays a fixed monthly premium to a health insurance carrier. In return, the carrier takes on the financial risk of claims, manages the plan, and keeps any savings if claims come in lower than expected.
It’s predictable—but not very flexible. Employers often get hit with rate hikes without clear explanations, and there’s little visibility into what’s really driving costs.
Self-Funded Plans
With self-funding (also called self-insurance), the employer covers employee claims directly. A third-party administrator (TPA) steps in to handle the day-to-day operations: processing claims, working with vendors, managing compliance, and more.
To protect against major unexpected costs, employers usually add stop-loss insurance.
Here’s the key difference: Instead of paying for projected risks, you pay for actual care—while gaining insight and flexibility you don’t get in traditional plans.
What Every Employer Health Plan Includes
No matter how a plan is funded, certain components are essential:
- Funding: Either fixed premiums or direct claim payments
- Claims Administration: Who handles and processes claims
- Networks & Vendors: Doctors, hospitals, pharmacies, and service partners
- Compliance & Reporting: Staying within regulatory guidelines
- Employee Support: Communications, help desks, and ongoing assistance
When these parts work together, your plan runs smoothly. When they don’t? That’s when costs rise and frustrations build.
Why Employers Are Moving to Self-Funded Health Plans
So what’s behind the growing shift toward self-funding? It’s not just about cutting costs—it’s about regaining control.
Build a Plan Around Your People
With self-funding, you’re not stuck with a cookie-cutter plan. You can tailor benefits to match your workforce. Want to focus on preventive care? Proactively manage chronic conditions? Remove wasteful benefits? You’re in charge.
Pay for What You Use—Not the Industry’s Average
Fully insured plans pool risk across a wide population. That means you might be paying for other companies’ high claims.
With self-funding, you’re only paying for your team’s actual care—plus administration and stop-loss coverage. And if claims are lower than expected? You keep the savings.
Get Real-Time Insights
Self-funded plans offer access to detailed claims data, which helps you make smarter, faster decisions. You can see what’s driving costs, track trends, and course-correct in real time.
This isn’t about taking on more risk. It’s about taking ownership of one of your biggest business expenses.
Optimizing Benefits in 2026: What Employees Want (and Plans Need)
Today’s workforce expects more from their health plans—and they should. It’s not just about having coverage; it’s about having care that’s accessible, convenient, and personal.
Here are a few trends shaping modern plans:
- Faster access to mental health care, with more provider options
- Telehealth and virtual care, making it easier to get help without time off
- Targeted support for chronic conditions like diabetes and heart health
- Modular or personalized benefits that reflect a diverse workforce
Employers aren’t just adding these to be competitive—they’re using them to prevent larger issues (and claims) down the line.
A well-designed self-funded plan gives you the flexibility to prioritize the benefits that matter— and reduce the ones that don’t.
The Power of a Transparent TPA
Self-funding gives you freedom—but someone still needs to manage the plan day to day. That’s where a third-party administrator (TPA) comes in.
But here’s the catch: Not all TPAs operate transparently.
Some charge hidden fees through:
- Percentage-of-savings models
- Markups on vendor services
- Commissions tied to specific solutions
These hidden structures can cloud true costs—and lead to decisions that benefit the administrator more than the employer.
Summit’s Approach: No Games, Just Clarity
At Summit, we’ve taken a different path:
- Simple PEPM (per employee per month) pricing—no hidden commissions
- No vendor markups—what the provider charges is what you pay
- Full access to your data, so you can see where every dollar goes
This model puts employers and consultants in control—so you can choose partners based on performance, not incentives.
Transparency isn’t just nice to have. It’s the foundation of a plan that works.
Key Takeaways: Rethinking Your Health Plan Strategy
As the health plan landscape evolves, here’s what matters:
- Self-funded plans offer flexibility, savings, and insight
- Smart benefit design supports retention, morale, and long-term costs
- Your administrative partner matters—a lot
- You don’t need all the answers—just a partner who gives you the full picture
Curious About Going Self-Funded?
Wondering if a transparent self-funded approach could work for your organization? Summit works with employers and consultants to explore the right options—no pressure, just clear, helpful insights.
Frequently Asked Questions (FAQs)
1. Are self-funded health plans only for big companies?
Not at all. Many small and mid-sized employers now use self-funding—especially with stop-loss coverage in place to put a limit on large claims.
2. Is self-funding riskier than being fully insured?
With the right plan design and stop-loss protection, you can manage risk strategically—not blindly transfer it. The goal is to understand your exposure and build a structure that fits your budget.
3. What does a TPA actually do?
A TPA is your behind-the-scenes operations team. They process claims, coordinate vendors, ensure compliance, and provide reporting—so your internal team can stay focused on core business priorities.
4. How does transparency help control costs?
When you can see where your money’s going, it’s easier to spot waste, evaluate vendor performance, and make better decisions. Transparent pricing and compensation align everyone around the same goal: a sustainable, effective plan.
5. Can self-funded plans include telehealth or modern benefits?
Absolutely. In fact, self-funding often gives you more flexibility to offer the benefits your employees want— from virtual care to targeted programs for specific conditions.
6. How do I know if self-funding is the right move?
Start with your claims history, team size, and goals. A transparent partner like Summit can help you evaluate all your options, model different scenarios, and decide whether self-funding fits your strategy.