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Is Health Plan Self-Funding Right for Your Firm?

by Inoventive Solutions
September 29, 2026

As group health costs continue climbing, some employers are starting to take a second look at self-funded, or partially self-funded plans.

These plans give employers more skin in the game and the ability to better address cost drivers and tailor their offerings to fit the needs of their employees.

But while the plans can save both the employer and their workers money, they are not for every organization. Plus, there is a degree of risk as a few serious health issues among group participants can blow open claims costs.

Small employer considerations

While medium-sized and large organizations are more apt to self-fund due to their resources, 21% of employers with three to 199 plan participants were self-funded in 2025, according to a study by the Kaiser Family Foundation. That’s compared to employers with:

  • 200 to 999 plan participants: 63%
  • 1,000 to 4,999 plan participants: 86%
  • 5,000 and more plan participants: 87%

Recently, insurers have been trying to address small and mid-sized employers’ concerns about risk and costs by rolling out “level-funded” plans. These vehicles provide a lower level of self-funding with a stop-loss insurance program that has lower attachment points than typical plans.

For level-funded plans, the insurer estimates the employer’s expected monthly expenses, which include:

  • A portion of the estimated annual cost for benefits,
  • The stop-loss protection premium, and
  • An administrative fee.

The employer pays the above to the insurer every month. If, at the end of the year, claims were significantly higher or lower than expected, there will be financial reconciliation between the employer and the carrier.

These level-funded plans differ from fully self-funded plans, where the employer assumes direct financial responsibility for the costs of enrollees’ medical claims. The employer will usually contract with a third-party administrator or insurer to handle claims and provide administrative services for the plan.

Employers may purchase stop-loss coverage to protect against catastrophic claims.

Stop-loss basics

While these plans are called self-funded, there is still a portion of the costs that is insured to protect against catastrophic claims or unexpectedly high utilization.

There are different types of stop-loss insurance that pay the cost of claims at a certain attachment point, when plan, individual or claims spending exceeds a designated value:

Specific stop-loss coverage — This policy provides protection for the employer against a high claim on any one individual. This is protection against abnormal severity of a single claim, rather than abnormal frequency of claims in total.

Aggregate stop-loss coverage — This policy may limit the total amount the plan sponsor must pay for all claims over the plan year.

The benefits

Customization — Self-funded plans let employers customize their plan to meet the needs of their workforce.

Cost control — Self-funded plans only pay the actual costs, as opposed to fully insured plans, where the premium goes towards the expected health care costs the insurer has forecast, plus its overhead, reserves, profit margin, and more.

Access to claims data — The employer gets detailed access to claims costs, so they can see what claims are driving costs. By looking at claims and plan participant needs, the employer can better decide which benefits to provide, enhance or remove if they are not being used.

Disadvantages

Compliance — Since the employer will be paying for the claims, they will be responsible for fiduciary and compliance issues.

Cash flow — The plan will need to have sufficient money going into its accounts regularly to pay for claims as they arise.

Volatility — Medical outlays can be unpredictable. A spate of high-cost claims can wipe out any potential savings.

The takeaway

If you’re fed up with rising group health plan premiums, talk to us about self-funding. We can review your current insurance arrangement and your plan costs to help you decide if it’s right for you.

"group
Uncategorized

Employers Explore New Strategies as Health Plan Costs Rise

by Inoventive Solutions
September 22, 2026

A number of surveys are predicting another year of steep group health insurance cost increases in 2027, prompting many employers to rethink plan designs, pharmacy benefits and relationships with health care vendors.

The Business Group on Health’s “2027 Employer Healthcare Strategy Survey” projects a median 9.2% increase in employer health care costs in 2027, which employers hope to reduce to about 8% through plan changes. Other forecasts predict similar premium increase in the coming year.

Multiple forces pushing costs higher

There is no single culprit behind the increases. Instead, employers are being hit by large claims, expensive prescription drugs and rising costs of treating common serious health conditions.

Catastrophic claims: According to a survey by the International Foundation of Employee Benefit Plans (IFEBP), employers cited catastrophic claims more often than any other factor as the primary driver of higher costs. A small number of employees play an outsized role in increasing average claims costs due to lengthy hospital stays, complex cancer treatments, specialty medications or other intensive care that can generate claims of hundreds of thousands of dollars or more.

Cancer is a major contributor. In the Business Group on Health survey, 70% of employers ranked cancer as the top condition driving their health care costs, and 92% placed it among their three most expensive conditions. Musculoskeletal conditions ranked second, cited by 68%, followed by cardiovascular conditions at 37%.

Prescription drugs: Pharmacy benefits now account for about one-quarter of employer health care spending, and drug costs are projected to increase 12% in 2026, according to Business Group on Health.

The pressure is coming from several directions. Among IFEBP respondents who identified specialty and other high-cost drugs as their primary cost driver:

  • 67% cited GLP-1 drugs,
  • 54% cited autoimmune and inflammatory therapies,
  • 42% cited cancer drugs, and
  • 21% cited cell and gene therapies.

Employers are grappling with how to provide access to effective but expensive treatments without allowing a small number of prescriptions to significantly increase total plan spending.

Medical care and provider pricing: Employers are also paying more for hospital and physician services.

Business Group on Health points to declining population health, rising provider prices and increased use of expensive therapies as part of the broader cost problem. Employers have also underestimated their health care costs for three consecutive years, illustrating how difficult medical expenses have become to predict.

Employers sharpen their cost-control strategies

With costs continuing to climb, employers are increasingly looking beyond simply raising deductibles and shifting more expenses to workers.

Approaches employers are considering include:

  • Steering workers to high-value providers. Centers of excellence, high-performance networks and care navigation programs can direct employees to providers with better outcomes and more competitive pricing. Eighty-four percent of Business Group on Health respondents plan to offer at least one center of excellence in 2027.
  • Reassessing pharmacy benefits. Employers are exploring transparent or next-generation pharmacy benefit managers that provide greater visibility into drug pricing and rebates. They are also tightening utilization controls on costly drugs, including GLP-1s, and encouraging the use of lower-cost biosimilars when clinically appropriate.
  • Demanding more from vendors. Employers are scrutinizing wellness, digital health and other benefit programs for measurable results. In 2027, 58% of Business Group on Health respondents plan to replace underperforming vendors, while the same percentage plan to eliminate underutilized programs. Seventy-one percent are increasing the portion of vendor fees tied to outcomes.
  • Improving employee navigation. Providing employees with cost and quality information before they schedule care may help them find higher-quality, lower-cost providers. Employers may also consider reducing cost-sharing for high-value preventive and chronic-condition care.
  • Analyzing claims data. Claims audits, utilization reviews and predictive analytics can help employers identify billing problems, high-cost conditions and opportunities for earlier intervention.

The takeaway

With cost pressures coming from multiple directions, a targeted strategy focused on the plan’s largest cost drivers may help control spending while preserving the benefits employees value.

Work with us and your carriers to review claims and utilization data before renewal.

"notices"/
Uncategorized

Pay Attention to Health Plan Notification Deadlines Ahead of Open Enrollment

by Inoventive Solutions
September 15, 2026

As fall approaches, it ushers in year-end open enrollment for many group health plans along with compliance deadlines plan sponsors need to be aware of to avoid running afoul of the law.

The Affordable Care Act and other laws require employers to furnish certain forms and documents to employees annually. To help your organization remain compliant, we’ve compiled a list of health and wellness plan notices that employers must provide annually, as well as a few that we recommend including in your benefits communications.

Most of these documents must be distributed during open enrollment.

Summary of Benefits and Coverage

The SBC gives employees a standardized, easy-to-compare summary of health plans’ benefits, deductibles, copayments, coinsurance, exclusions and coverage limitations. It is required for most group health plans, including self-insured plans. 

When it must be distributed: With open enrollment materials when employees have an opportunity to elect or change coverage.

Medicare Part D Creditable Coverage Notice

Employers offering prescription drug coverage must notify Medicare-eligible employees whether their coverage is creditable under Medicare rules. Creditable coverage is expected to pay at least as much as standard Medicare Part D coverage.

While there is no penalty for employers for failing to send the notice, failure to provide it can lead to higher costs for staff who later enroll in Medicare Part D without having maintained creditable coverage. Because employers typically do not know which employees are eligible for Medicare, sending this notice to all employees is considered a best practice. You can find model notices here.

When it must be distributed: By Oct. 15 each year.

Grandfathered Plan Notice
This document outlines ACA protections for non-grandfathered plans, ensuring participants understand their coverage rights.

When it must be distributed: This notice must be distributed whenever a summary of benefits, description of coverage or enrollment material is provided to participants and beneficiaries.

Children’s Health Insurance Program Notice

This document alerts employees to the availability of premium assistance programs through their state of residence. This notice should be sent to all employees, regardless of location, to avoid the burden of tracking residency status. Failure to provide the CHIP notice can result in fines of up to $137 per employee per day.

When it must be distributed: Although it doesn’t have a fixed deadline, many employers include it in their annual open enrollment materials to ensure consistent delivery.

The Women’s Health and Cancer Rights Act Notice

This federally mandated disclosure informs group health plan participants and beneficiaries of their rights to post-mastectomy breast reconstruction benefits. It must be sent to all employee participants and covered beneficiaries under your health plan.

When it must be distributed: Annually, typically included with open enrollment materials.

Individual Coverage Health Reimbursement Arrangement Notice

Employers offering an ICHRA must give eligible employees a written notice explaining the arrangement and important consequences of accepting it. Among other things, the notice helps employees understand how the ICHRA interacts with individual health insurance coverage and eligibility for premium tax credits through the ACA Marketplace. 

When it must be distributed: Generally, at least 90 calendar days before the beginning of each plan year. Employees who become eligible later, such as certain new hires, generally must receive the notice no later than the date the ICHRA can first take effect for them.

"GLP-1"/
Uncategorized

Employers Try Different Tactics to Cope with GLP-1 Coverage

by Inoventive Solutions
September 9, 2026

Employers are facing an increasingly difficult benefits decision as demand for GLP-1 drugs grows: absorb the rapidly rising cost, restrict coverage or find another way to help employees access the weight-loss medications.

The financial pressure is significant. GLP-1 drugs prescribed for weight loss represented 11.4% of corporations’ annual claims in 2025, up from 6.9% in 2023, according to the International Foundation of Employee Benefit Plans. The foundation also found that only 36% of employers covered the drugs for weight loss

Demand, meanwhile, remains strong. A 2025 KFF poll found that one in eight U.S. adults was taking a GLP-1 medication for weight loss, diabetes or another condition.

That leaves employers trying to balance the immediate cost against the possibility that the medications may improve employee health and reduce other medical expenses over time. While some are opting not to cover the drugs for weight loss, others are exploring different ways to help workers access them.

Coverage with certain limitations

An employer can design coverage so that GLP-1 medications are covered only when prescribed to treat certain conditions, such as diabetes or chronic weight management, or when used for preventive care.

This approach can reduce the number of individuals requiring treatment under the plan and ultimately lower long-term treatment costs for these conditions.

An employer can also offer GLP-1 coverage while requiring medical management techniques, such as prior authorization, step therapy and site-of-care requirements.

Requiring one or a combination of medical management techniques before providing employees with GLP-1 coverage can encourage the use of alternative treatments and limit the number of employees who require GLP-1 medications.

Coverage under an HRA

An alternative to adding GLP-1 medications to a group health plan’s formulary is letting employees use a health reimbursement arrangement to cover GLP-1 drug costs. HRAs allow employees to receive tax-free reimbursement for all or a portion of their medical and prescription drug expenses.

Participants typically must enroll and participate in a weight management program to qualify for HRA reimbursement for a GLP-1 prescription.

The program evaluates each participant’s ongoing need for the medication and determines whether to approve the request. If approved, participants fill their prescriptions through a direct-to-consumer pharmacy. Employers can then use the HRA to reimburse all or a portion of the prescription cost.

Looking outside traditional insurance

Another emerging strategy is to bypass insurance.

Drug manufacturers and other vendors have developed direct-to-consumer programs that allow patients to obtain GLP-1 medications at lower cash prices. Employers that exclude weight-loss drugs from their regular pharmacy benefits may direct employees to one of these programs and, in some arrangements, reimburse part of the expense.

A similar direct-to-employer model may allow an employer to carve out GLP-1 weight-loss medications from its pharmacy benefit and obtain fixed, negotiated prices through a specialized vendor. These arrangements could reduce costs and make them more predictable, but employers should proceed carefully.

Purchases made outside the pharmacy benefit may not count toward an employee’s health plan deductible or out-of-pocket maximum. Moving prescriptions outside the traditional system may also make it more difficult to see a patient’s complete medication history, potentially creating care coordination and drug interaction concerns.

Employers also need to consider existing pharmacy benefit manager contracts, which may contain exclusivity provisions. Special care may be necessary for high-deductible health plans to avoid inadvertently affecting employees’ health savings account eligibility.

The takeaway

Much can hinge on how employers handle GLP-1 coverage and the options they provide their employees. The key is to provide access that supports employee health without allowing one fast-growing category of medications to overwhelm the benefits budget.

Before making changes, employers should work with us to review utilization, costs, plan design and alternative purchasing arrangements.

"group
Uncategorized

Group Health Plan Affordability Level Rises for 2027

by Inoventive Solutions
September 1, 2026

The IRS has increased the group health plan affordability threshold, which determines whether an employer’s lowest-premium health plan complies with Affordable Care Act rules, for plan years beginning in 2027.

The threshold has been set at 10.22% of an employee’s household income, up from 9.96% in 2026. The higher threshold will give employers more leeway in determining employees’ share of health insurance premiums. It also marks the first time the threshold has exceeded 10%.

Under the ACA, “applicable large employers” — those with 50 or more full-time or full-time-equivalent employees — must offer their workers at least one health plan that is considered affordable based on a percentage of the lowest-paid employee’s household income. If an employer’s plan fails this test, the employer may face penalties for noncompliance.

For 2027, coverage is considered affordable if the lowest-paid employee’s required contribution for self-only coverage under the employer’s lowest-cost plan providing minimum value does not exceed 10.22% of their household income.

The affordability test applies only to the employee’s cost for self-only coverage, not to the premium for family coverage. If an employer offers multiple health plans, the test is based on the lowest-cost option that provides minimum value.

For non-calendar-year plans, the affordability percentage in effect when the plan year begins applies throughout that year. That means a plan year beginning after Jan. 1, 2026, would continue using the 9.96% threshold until the next plan year starts in 2027.

Calculating

Since employers typically don’t know their workers’ household incomes, the IRS provides three safe harbors for determining affordability:

  • W-2 wages: The employee’s required contribution generally cannot exceed 10.22% of their Form W-2 wages from the employer.
  • Rate of pay: For hourly employees, affordability is based on the employee’s hourly wage multiplied by 130 hours per month. For salaried workers, the monthly salary is used.
  • Federal poverty level: Employers can base affordability on the federal poverty level for a single individual.

For calendar-year 2027 plans using the federal poverty level safe harbor in the mainland U.S., the employee’s maximum monthly contribution is about $135.93, based on the 2026 federal poverty level of $15,960. Employers may want to set the contribution slightly below the maximum to avoid exceeding the limit.

Penalties

Failure to provide affordable coverage may result in a penalty of $5,670 per affected full-time employee in 2027, up from $5,010 in 2026. The penalty may apply when an employee is offered unaffordable coverage and receives a premium tax credit for Marketplace coverage.

A separate Employer Shared Responsibility Payment may apply if an employer fails to offer minimum essential coverage to at least 95% of its full-time employees and their dependents and at least one full-time employee receives a premium tax credit for Marketplace coverage.

The separate penalty will rise to $3,780 per employee in 2027 from $3,340 in 2026. It is generally calculated using the employer’s total number of full-time employees minus 30.

Both penalties are indexed to inflation and calculated monthly.

The takeaway

The higher affordability threshold gives employers more flexibility in setting employee premium contributions for 2027, but now is the time to review those amounts in preparation for the upcoming plan year.

We can help assess your plans’ affordability and confirm that they meet the standard, so your firm stays compliant.

"Caregiving
Uncategorized

Caregiving Demands Take Toll on Workers: How Employers Can Help

by Inoventive Solutions
August 25, 2026

As Americans live longer, many of the country’s workers are balancing job responsibilities with caregiving duties — contributing to higher stress, lower productivity and increased burnout.

Caregiving demands can lead to absenteeism, distraction, fatigue and scheduling conflicts, while the emotional strain of supporting loved ones may reduce engagement and increase the risk of mistakes or accidents, which can turn into costly blowback for your organization. The challenge for employers is that many workers keep these struggles to themselves, potentially leading to them leaving due to the stress.

Since caregiving duties can fall on people of any generation, it’s important for your organization to have a plan to assist staff facing these added pressures.

Gen X most affected

Gen X workers (generally those ages 46 to 61) are feeling the greatest pressure, with many supporting aging parents whose health needs are increasing while still raising children or helping young adult children achieve financial independence.

A recent survey by resume platform Zety found that nearly one in four Gen X employees spends at least two full workdays each week caring for family members.

The challenge extends well beyond Gen X. Care.com’s “2026 Future of Benefits Report” found that:

  • Nearly half of full-time employees currently juggle caregiving responsibilities,
  • 37% of workers who care for aging relatives also support minor or adult children,
  • 53% of employees had missed work because of caregiving challenges,
  • 60% experienced increased workplace stress, and
  • Nearly half reported lower productivity while arranging or managing care.

Women continue to shoulder most unpaid caregiving responsibilities. According to AARP’s “Caregiving in the U.S.” survey, women account for 61% of unpaid family caregivers nationwide. Care.com also reported that nearly half of women who voluntarily left the workforce in 2025 cited caregiving responsibilities as a primary reason for doing so.

The effects

Employees facing ongoing caregiving strain may be more likely to:

  • Experience burnout,
  • Disengage at work,
  • Reduce their work hours,
  • Decline promotions, or
  • Leave the organization altogether.

Burnout and disengagement are especially damaging. They can lead to a higher risk of workplace accidents, lower productivity, poor performance and reduced employee morale. If a key employee leaves due to caregiving demands, it can deal a blow to your organization, regardless of whether they are in sales, administration, operations or management.

What employers can do

  • Offer flexible work arrangements — These remain one of the most effective tools. Allowing remote work, flexible schedules or compressed workweeks when practical can help employees manage medical appointments and caregiving emergencies without neglecting work responsibilities.
  • Expand caregiver benefits — These may include elder care referral services, backup care programs, dependent care assistance and employee assistance programs that provide counseling, planning resources and caregiver support.
  • Educate your staff — Make sure employees understand what benefits are available. Many are unaware that their benefit packages may include caregiving resources through employee assistance programs, health plans or third-party vendors.
  • Train managers to recognize caregiver stress — Encourage open communication and evaluate employees based on results rather than how many hours they are in the office. These practices can help them remain productive while managing family responsibilities.

If you have questions about caregiving benefits, please give us a call.

"Medicare"/
Uncategorized

CMS Revises Medicare Part D Creditable Coverage Rules

by Inoventive Solutions
August 18, 2026

Employers that offer prescription drug coverage will need to take a fresh look at whether their plans qualify as creditable coverage after the Centers for Medicare & Medicaid Services finalized rules that take effect in 2027.

The changes follow a major redesign of Medicare Part D in 2025, which enhanced prescription drug benefits by significantly lowering enrollees’ maximum out-of-pocket costs. As a result, CMS concluded that the long-standing method employers use to determine whether their drug coverage is “creditable” no longer reflects today’s Medicare benefit.

The changes may be particularly important for employers that offer high-deductible health plans, as some of those plans could struggle to meet the new creditable coverage standards.

Why the changes matter

Employees generally must enroll in Medicare Part D when they first become eligible unless they have creditable prescription drug coverage through another source, such as an employer-sponsored health plan.

If they go at least 63 consecutive days without creditable coverage after becoming eligible, they may face a permanent late-enrollment penalty upon later enrollment in Part D.

Because of that, employers that offer prescription drug coverage typically must notify Medicare-eligible employees and dependents each year whether their coverage is creditable. The notice is usually distributed before the annual Medicare open enrollment period that begins Oct. 15.

What’s changing

For years, many employers have relied on a simplified “safe harbor” test to determine whether their prescription drug coverage qualified as creditable. The test generally requires plans to meet several basic coverage standards and pay at least 60% of prescription drug costs on average.

Beginning in 2027, that methodology goes away.

Instead, employers will generally need to:

  • Use actuarial testing to compare their prescription drug coverage with Medicare Part D, or
  • Use CMS’ revised simplified methodology.

Under the revised approach, employer plans generally must cover brand-name drugs, generic drugs and biological products, provide reasonable pharmacy access and pay an average of at least 73% of participants’ prescription drug costs in 2027. CMS has indicated that required actuarial values are expected to increase in future years.

The higher standard means some employer health plans that previously qualified as creditable may no longer do so without plan changes or a more detailed actuarial review.

High-deductible health plans may face particular challenges. CMS emphasized that HDHPs are not automatically considered non-creditable, and features such as coverage of certain preventive or maintenance medications before the deductible and lower member cost-sharing after the deductible is met may help some HDHPs satisfy the new standards.

Employers with HDHPs may want to work with us to determine whether any changes are needed before the 2027 plan year.

Next steps

As 2027 approaches, employers may want to:

  • Review whether their prescription drug coverage will continue to qualify as creditable.
  • Coordinate with us or their carriers to complete updated creditable coverage testing.
  • Pay attention to HDHPs, which may require additional analysis.
  • Update Medicare Part D creditable coverage notices, if necessary, before Medicare’s annual open enrollment.
  • Communicate changes early so Medicare-eligible employees can make informed enrollment decisions and avoid late-enrollment penalties.

Reviewing prescription drug benefits now can help employers avoid compliance issues and ensure that employees receive the information they need to make important Medicare coverage decisions.

"Rising
Uncategorized

Rising ACA Exchange Costs May Slow Interest in ICHRAs

by Inoventive Solutions
August 11, 2026

Individual coverage health reimbursement arrangements have attracted growing interest from employers looking for an alternative to traditional group health plans. However, a new survey suggests that rising Affordable Care Act Marketplace premiums following the expiration of enhanced federal subsidies may become one of the biggest obstacles to broader adoption.

The Employee Benefit Research Institute (EBRI) and Morgan Health surveyed nearly 1,000 employer benefits decision-makers and found that more than one-third were planning or evaluating an ICHRA. However, only 11% had implemented one, suggesting that many employers remained in the research stage rather than being ready to make the switch.

An ICHRA allows employers to contribute a fixed amount that employees use to purchase individual health insurance, usually through the ACA Marketplace, instead of participating in the employer’s group health plan. The arrangement gives employers predictable benefit costs while allowing employees to choose the plan that best fits their needs.

For 2026, employers can generally contribute up to $6,450 annually for self-only coverage and $13,100 for family coverage while meeting the ACA affordability standards. However, those amounts may not come close to covering premiums for many employees, raising concerns that they could face significantly higher costs if employers move from a group health plan to an ICHRA.

Employers’ biggest concerns

  • ACA Marketplace premiums. 85% of large employers, 81% of small employers offering health coverage and 79% of small employers without health coverage worried that individual-market premiums were too expensive for employees.
  • High out-of-pocket costs.84% of both large and small employers offering health coverage believed deductibles and other out-of-pocket costs could be too high for workers purchasing coverage on the exchange.
  • Marketplace quality concerns. Employers questioned whether individual-market provider networks and plan quality matched those of traditional group health plans.
  • Employees prefer group health plans. Employers said worker preference for traditional employer-sponsored coverage remained one of the biggest barriers to switching.
  • Limited knowledge of ICHRAs. Between 56% and 69% of employers correctly understood the basic ICHRA model, and 55% of small employers that did not offer health coverage were unaware that ICHRAs were even available.
  • Administrative complexity. Employers also expressed concerns about implementation, compliance requirements and ongoing administration.

Despite those concerns, employer interest continues to grow, according to the EBRI report. Employers with 100 or more workers expressed the strongest interest, with 62% saying they were likely to adopt an ICHRA within two years. Among small employers that did not offer health coverage, one in four said they would prefer offering an ICHRA rather than a traditional group health plan.

What employers said would increase adoption

According to the survey, employers said they would be more likely to offer an ICHRA if:

  • Provider networks in ACA Marketplace plans match the quality and choice available through group health plans (85%).
  • ICHRAs integrate with payroll systems (79%).
  • Employers could add supplemental benefit solutions (79%).
  • ICHRAs integrate more seamlessly with existing health benefits (78%).
  • More peer employers adopt ICHRAs (76%).
  • Federal or state tax credits encourage adoption.
  • The ACA Marketplace becomes more stable, affordable and predictable.
"Proposed
Uncategorized

Proposed Rule Would Make Electronic Health Plan Notices the Default

by Inoventive Solutions
August 4, 2026

The U.S. Department of Labor has proposed a rule that would make electronic delivery the default for delivering many required health plan notices, a move that could significantly reduce paperwork and administrative costs for employers.

For employers, the proposal could substantially reduce the time and expense of printing, stuffing and mailing millions of required benefits notices each year. Employees may also find it easier to access important plan information on their phones or computers whenever they need it.

If finalized, the rule could cut the number of paper notices mailed each year from roughly 1.9 billion to fewer than 200 million, saving employers an estimated $402 million annually, according to the department. The proposal would affect approximately 2.8 million ERISA-covered health plans serving about 155 million participants.

How it would work

The proposed rule would allow electronic delivery of many health plan disclosures required under ERISA, including:

  • Summary plan descriptions
  • Summaries of material modifications
  • Summary annual reports
  • COBRA election and continuation coverage notices
  • HIPAA special enrollment notices
  • Claims and appeals determinations, including benefit denials
  • Other required health plan disclosures under ERISA

Employees and beneficiaries would receive an e-mail or text notification when these documents are available online.  They would still have the right to request free paper copies or opt out of electronic delivery altogether.

Current electronic delivery rules date to 2002 and generally limit default e-delivery to employees who have work-related computer access or have consented to receive documents electronically. The proposed rule would establish a broader safe harbor reflecting how employees communicate today and extend e-delivery to a much larger share of the workforce.

What employers can do now

While the rule has not yet been finalized, employers can begin preparing by:

  • Reviewing how they distribute health plan communications,
  • Confirming employee e-mail addresses and mobile phone numbers are up to date,
  • Evaluating whether their benefits platforms can support electronic disclosures, and
  • Developing procedures for employees who prefer to receive paper notices.

If adopted, the rule would likely take effect for documents related to the 2028 plan year as it would be too late to implement for 2027.

"Benefits"/
Uncategorized

Benefits Disconnect: Employees Want More Support, Better Communication

by Inoventive Solutions
July 28, 2026

A new report finds that many employers believe they are doing a good job meeting workers’ benefits needs, but employees often see things differently.

The findings in Aflac’s “Workforces Report” highlight growing gaps in communication, financial preparedness and access to benefits information that could affect engagement and retention. The report identifies areas where employers can improve benefits delivery and increase benefit uptake and usage, which can help improve employee retention and attract new talent.

Report findings

  • The report found that 75% of employers believe employees are satisfied with their benefits packages, but only 65% of employees say they are.
  • One of the biggest disconnects involves communication and guidance during enrollment. Nearly 37% of employees said they want to speak with a real person when making benefits decisions, yet only 28% of employers offer that option.
    Similarly, 32% of employees want one-on-one access to a benefits consultant, but only 28% of employers provide it.
  • While 78% of employers believe their workers could handle a major unexpected medical bill, 44% of employees said they could not afford $1,000 in out-of-pocket costs for an illness or injury.
  • More than half of employees reported anxiety about health care costs not covered by insurance. 

Stress and burnout

The report points to rising levels of stress and burnout. Nearly three-quarters of employees reported moderate to very high stress. Burnout reached its highest level in six years.

Gen Z workers reported the highest burnout rates, surpassing millennials. Only 48% of employees said they are confident their employers care about their mental health, down from 54% a year earlier. 

Communication gaps may be contributing to the problem. Only 42% of employees said they fully understand their health insurance coverage, down from 49% the previous year.

Meanwhile, 69% said they want more information about their benefits. Although 46% of employers said they communicate about benefits throughout the year, only 34% of employees agreed that they receive year-round communication. 

Digital access has become increasingly important as well. More than four out of five employees said the ability to manage benefits online is very or extremely important, including 87% of Gen Z and millennial workers. However, 30% of employers still do not offer online benefits management tools. 

What employers can do

The findings suggest that employers do not necessarily need to offer more benefits, but they may need to make existing benefits easier to understand and use. Employers can improve engagement by:

  • Communicating about benefits year-round instead of only during open enrollment.
  • Providing access to benefits counselors or advisers.
  • Expanding digital enrollment and self-service tools.
  • Offering supplemental benefits that address financial concerns.
  • Investing in mental health and burnout prevention programs.
  • Regularly surveying employees to understand which benefits they value most.

Organizations that close these gaps may improve employee satisfaction, reduce stress and strengthen retention in an increasingly competitive labor market. Workers who are highly satisfied with their benefits are more than twice as likely to report high job satisfaction as workers who are less satisfied.

Employers’ top challenges in offering benefits

(Percentage ranking the issue among their top three challenges) 

  • Offering robust benefits while staying within budget or cost constraints: 54%
  • Understanding what employees want in benefits offerings: 56%
  • Determining the benefits that will meet employees’ needs: 48%
  • Finding time to dedicate to benefits selection and administration: 41%
  • Communicating and educating employees about benefits: 37%
  • Understanding options to control benefits costs: 32%
  • Managing benefits administration and regulatory compliance: 31%
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