The Health Insurance Model Is Rigged—Here’s What Smart Business Owners Are Doing Instead
Our team has worked with business owners across the country for years, and the most common thing I hear is:
“Why does our health insurance cost more every year, and why do we feel like we’re getting less?”
If you’ve ever asked yourself that, you’re not crazy.
The system really is broken—and the data just confirmed it.
According to new numbers from Mark Farrah Associates, millions of businesses are leaving the traditional health insurance model behind. And after you understand what’s happening, you might be next.
Let’s break it down.
What is the traditional group insurance model (and why is it failing)?
Most small to mid-sized businesses are stuck in what's called a fully-insured group plan—also known as a “group risk” plan.
Here’s how that works:
- You pay a fixed monthly premium to a big insurance carrier.
- That carrier puts you in a massive pool with thousands of other businesses.
- They use those pooled premiums to pay claims—anyone’s claims, not just yours.
- If claims are high across the pool (even if it’s not your employees), everyone pays more next year.
That’s what we mean by “group risk”: your rates go up based on the overall risk of the pool—not the health of your actual workforce.
👉 That’s why many employers see double-digit premium hikes year after year, no matter how healthy their team is.
What’s replacing it? Self-Funding.
Larger companies have known this secret for a long time.
Instead of paying into someone else’s pool, they self-fund—which means they pay for their employees’ healthcare directly, with the help of an administrator. This model is often called an ASO contract (Administrative Services Only).
Think of it like running your own mini health plan.
The benefit?
You only pay for your group’s actual care. Not someone else’s.
But here’s the catch: self-funding comes with risk.
A single expensive claim can blow up your budget. That’s why it used to be a strategy only for the big players.
Now here’s where it gets good: Level Funding.
Level funding is a newer model that gives small and mid-sized businesses access to the savings and control of self-funding, without the scary financial risk.
✅ Your monthly costs are capped.
✅ You get better visibility into how your dollars are spent.
✅ You only pay for your employees—not for someone else’s chronic conditions in another state.
It’s self-funding with training wheels, and it’s changing the game for companies who’ve felt trapped in the old system.
So what’s the data telling us?
🚨 According to 2024 enrollment trends:
- Traditional group risk plans lost nearly 1.5 million members last year—a 2.9% drop.
- Meanwhile, self-funded plans grew to cover over 132 million people, now making up 41.4% of all health insurance enrollment in the U.S.
That’s not a blip.
That’s a wave.
Businesses are sick of paying into rigged systems.
They’re opting out of the old insurance game and taking more control.
And level funding is how they’re doing it—safely.
How our program fits in
At Kennion Benefit Advisors, we’ve built a private level-funded benefits program specifically for businesses like yours—designed to be simple, flexible, and tailored to your team.
No risky open-ended expenses. No gimmicks like “rebates.”
Just a smarter way to provide care and control costs.
If you’re frustrated with rising premiums but not sure where to start, you don’t have to figure it out alone. We’ll walk you through it, show you exactly how it works, and even send over a sample proposal so you can see what’s possible.
This is your chance to stop overpaying—and start building a benefits plan that works for you.