The Five Self-Funded Trends That Brokers Need to Know
With 2025 well underway, the self-funded insurance industry continues to face challenges and shifts. Some of what we are seeing include ongoing trends such as rising healthcare costs. Still others require constant vigilance, like ongoing regulatory changes, and the innovations in plan design that are reshaping the market. Brokers who stay ahead of these five trends will be better positioned to advise their clients and optimize cost-saving opportunities.
Rising Healthcare Costs and Employer Response
Healthcare costs have continued their upward trajectory, with global medical expenses projected to increase by over 10% this year.1 Many self-funded employers are doubling down and getting creative with their cost-containment strategies, including direct contracting with providers, reference-based pricing, and enhanced claims management to mitigate expenses.
Increased Adoption of Level-Funded Plans
Small to mid-sized employers are turning to level-funded plans as an alternative to fully insured coverage. Level-funded plans are ideal for employers looking for increased plan flexibility and insights into cost containment opportunities. This development, which gained momentum in recent years, will likely remain strong in 2025 as businesses seek predictable costs with the potential for refunds or partial refunds on unused claims dollars.
Prescription Drug Cost Management
Specialty drug spending continues to be a significant driver of healthcare costs. Employers and health plans continue to seek strategies to manage rising prescription costs, particularly for specialty medications, which remain a significant driver of overall healthcare spending. Legislative and regulatory scrutiny of pharmacy benefit managers (PBMs) is intensifying, with a focus on transparency, reimbursement structures, and patient access to lower-cost drugs. Additionally, alternative sourcing strategies—such as international drug importation and direct contracts with pharmaceutical manufacturers—are gaining traction as organizations look for innovative ways to reduce costs while maintaining quality care.
Growth of Alternative Plan Structures
Minimum Essential Coverage (MEC) plans remain a popular option among smaller employers seeking to meet Affordable Care Act (ACA) requirements at a lower cost. As healthcare premiums continue to rise, many businesses are turning to MEC plans to offer basic benefits to employees at a low cost. Typical MEC plans cover basic services such as preventative care and essential benefits required by the ACA. However, there are options that provide a more comprehensive list of services including virtual care options and behavioral health while keeping costs low like the WorkChoice™ Benefits MEC plans offered by ClaimChoice.
Technology and Data-Driven Decision-Making
Advancements in AI-powered analytics, automated claims processing, and member engagement platforms continue to enhance the self-funded experience for all stakeholders. These tools help optimize plan design, detect fraud, and provide better insights into cost drivers. There are also challenges to be mindful of as well with increasing concerns about data protection, especially in the healthcare sector.
As 2025 progresses, brokers who stay informed on these trends will be best equipped to help their clients navigate self-funding. ClaimChoice offers unique solutions to address these trends and keep our broker partners ahead of the game including our WorkChoice™ Benefits MEC plans, flexible level-funded plan options, and our partnership with ChoiceScriptsRx for strategic pharmacy management and cost containment.
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