As small group premiums in Wisconsin surge— an expected increase of 16% in 2026—larger employers are not immune to the consequences. While large group plans typically benefit from greater bargaining power and risk pooling, several dynamics are shifting:
- Competitive Pressure and Talent Acquisition: Small employers facing steep premium hikes may reduce benefits or shift costs to employees. This creates a competitive advantage for large employers who can maintain richer benefits packages. However, it also raises expectations among job seekers, pushing large employers to enhance offerings to remain attractive
- Strategic Shifts Toward Cost Control: Large employers are increasingly adopting alternative funding models like self-insurance, Direct Primary Care (DPC), and Health Reimbursement Arrangements (HRAs), including ICHRAs. These models offer flexibility and predictability, especially as traditional group premiums continue to rise
- ICHRA adoption is growing among large employers with diverse workforces, allowing tailored contributions by employee class or geography.
- Wellness programs, high-deductible plans with HSAs, and direct contracting with providers are also gaining traction as cost-containment strategies.
- The Rise of Direct Primary Care (DPC) is gaining traction among Wisconsin employers as a cost-effective complement to traditional insurance. Under DPC, employers contract directly with primary care providers for a flat monthly fee—typically $40 to $90 per employee—covering unlimited access to routine care. Recent legislation aims to formally define DPC agreements and exempt them from insurance regulation, making it easier for employers to adopt.
- Market Consolidation and Reduced Choice: Both small and large group markets are becoming more concentrated, with fewer insurers dominating the landscape. This trend reduces competition and may lead to higher premiums and fewer plan options for large employers as well
- Policy and Regulatory Implications: Wisconsin employers—large and small—should be increasingly vocal about the need for health care cost transparency and reform. Rising premiums are among the top concerns for businesses in the state
The sharp rise in small group premiums is not an isolated issue—it’s a signal of broader systemic pressures. Large employers in Wisconsin should look to respond by restructuring benefits, exploring alternative funding, and advocating for policy change. The divide between small and large group capabilities may widen, but both sectors are converging on the need for flexibility, transparency, and innovation in health benefits.
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