Insurers pitch employers on alternative health plans to save costs

Modern Healthcare – Wednesday, December 17, 2025
By Noah Tong

Some very big health insurance companies and a bevy of startups are striving to win over employers vexed by rising health benefit costs with new plan designs.

Alternative health plans such as variable copayment plans that favor certain in-network providers and individual coverage health reimbursement arrangements, better known as ICHRAs, may appeal to businesses that expect healthcare costs to continue accelerating and are reconsidering their employee benefits. A significant share of employers has adopted these models already.

UnitedHealth Group subsidiary UnitedHealthcare — the insurance market leader — CVS Health subsidiary Aetna and Cigna offer these kinds of plans alongside their traditional policies. Smaller insurers are trying to carve out a niche in a market that covers 165 million people.

Angle Health touts the role of its predictive analytics in plan design. Curative emphasizes preventive health and its cash card for out-of-network care. Oscar Health is one of many companies embracing ICHRAs. Centivo’s model centers on advanced primary care networks. Sidecar Health promises no networks, no prior authorizations and upfront pricing. Other entrants include Valenz Health, XO Health and Judi Health.

More than one-third of employers with 500 or more workers will offer nontraditional health plans in 2026, according to a survey the consulting company Mercer conducted in April. Another 29% were considering them for the near future.

“You’re going to see a lot of procurements and companies going out to bid and trying to find alternatives to standard insurance products,” Morgan Health CEO Dan Mendelson said. The JPMorgan Chase division has invested in 11 employer-sponsored healthcare companies.

Some insurers have been in the variable copay plan market for several years and dominate this segment.

Surest Health Plan — originally created by UnitedHealth Group and St. Louis-based Ascension as Bind Benefits — pioneered the model. Members use an app to compare more than 1 million copays for in-network UnitedHealthcare providers.

Half of UnitedHealthcare’s biggest clients have opted into Surest Health Plan, said Alison Richards, the unit’s CEO. The plan is available in 44 states and the company introduced a level-funded offering this year.

Other major insurers followed UnitedHealth Group’s lead. Aetna’s Informed Choice similarly pegs lower copayments to choosing certain providers and Cigna unveiled a copay-only plan called Clearity last month.

“You will see every major insurance company with a dynamic copay product in the market within the next year, two years max,” said Brad Otto, a partner at the venture capital firm SpringTide Ventures. Otto sits on the board for Helm Health, a software startup that works with insurers on variable copay plans.

Many Blue Cross and Blue Shield insurers use Coupe Health, which Blue Cross and Blue Shield of Minnesota seeded. Highmark’s CoPayGo has 3,000 members and is intended for large, self-funded employers, Taylor Mackay, the company’s commercial products strategy partner, wrote in an email.

HealthPartners will launch Simplica NextGen CoPay to large, self-funded employers in Minnesota next month and may offer it to fully insured employers as soon as 2027, said Moe Suleiman, senior vice president of commercial business.

This form of employee health benefits remains the exception to traditional insurance, however, said Purchaser Business Group on Health President and CEO Elizabeth Mitchell. “This is not a huge trend,” she said. Purchaser Business Group on Health members, which include Amazon, Costco and GEICO, appear more interested in direct contracting between employers and health systems, she said.

Just 7% of large employers expected to have variable copay plans in place next year, although 20% were considering it, according to the Mercer survey. Uptake is most common among wholesalers and retailers, Mercer found. Purchaser Business Group on Health members embracing variable copay plans are generally utility companies or manufacturers, Mitchell said.

Eliminating deductibles and pushing variations on tiered provider networks through dynamic copays may not be entirely novel ideas, but they are seeing a resurgence as high-deductible plans fall out of favor.

“There is a stark contrast between traditional plans and the emerging, nimble, new third-party administrators in terms of their readiness to meet employer needs,” Mitchell said.

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