ICHRA, reference-based pricing, narrow networks, direct contracting, cash pay — it seems you can’t escape these terms today in the employer health benefits market. Each is traceable back to the same gradual shift happening among the leverage structures that have defined the payer-provider relationship for decades.
Much of that shift is because of a departure from fully insured coverage, in which an employer pays an insurer to take on risk, to self-funded plans, where the employer pays claims directly and hires an insurer to handle the back-end administrative functions. From 2015 to 2025, self-funding among large employers stayed flat at roughly 80%, while the real movement came from small firms, according to KFF. Among small employers, self-funded enrollment rose from 17% to 27% over the decade and level-funded coverage (a self-funded variant paired with stop-loss coverage) surged from 7% in 2019 to 37% in 2025.
As employers have taken on more risk and gained more visibility into what their plans actually pay (or at least try to), more scrutiny is arising around the value of insurers’ provider networks and their ability to actually negotiate lower prices.
“I don’t think provider networks are disappearing. I think they’re being questioned in ways they weren’t five years ago,” Stacy Mays, a former senior health insurance executive, told Becker’s. Since her time at organizations such as UnitedHealth and Capital Blue Cross, Ms. Mays has gone on to start her own consulting firm, Copeland Road Health Ventures.
Before federal price transparency rules took effect, she said, most employers had little visibility into the rates their plans actually paid and were told that discounts were broadly similar across carriers. The data has since shown otherwise, revealing wide variation across networks and, in some cases, cash prices below contracted rates. If a network’s main value was negotiating better prices, she said, employers and providers are now positioned to see when that may not be the case.
“If you look at networks from the employer perspective, you have to ask whether employers are really getting value from a network or whether the network is simply the accepted way that healthcare is organized,” Ms. Mays said.
The pressure is expected to intensify next year, with the medical cost trend for the commercial group market projected to hit 9%, or the highest in 17 years, according to PwC. Pharmacy spending, provider consolidation and AI-driven coding, along with out-of-network payment disputes under the No Surprises Act, are all among the main drivers.
The largest insurer, UnitedHealthcare, expects its self-funded membership to grow by up to 750,000 this year, part of a broader tilt of its commercial book toward administrative services.
“The industry has spent 25 years asking employers and employees to accept higher deductibles, more restrictions, more complexity and more out-of-pocket costs,” Ms. Mays said. “If those approaches were going to solve the problem, they would have solved it by now.”
All that math is pushing employers toward that original list of alternative arrangements that route around the traditional network, from reference-based pricing and cash pay programs to contracting directly with health systems.
“On the surface they look like different ideas, but they’re all challenging assumptions that have existed for a long time about how health insurance should work,” Ms. Mays said.
In December, Northwell Health and the 32BJ Health Fund, which represents more than 100,000 building-service workers in the New York City area, finalized what was billed as the largest direct-contracting arrangement of its kind.
Mark Cuban has launched Cost Plus Wellness, a direct contracting platform that connects self-insured employers with providers through public contracts that bar insurers from using them. Altamonte Springs, Fla.-based AdventHealth, after enrolling more than 18,000 of its own workers in an internal narrow-network plan, wants to start selling a version of the model to employers in its area.
And beginning in 2028, CMS will allow non-network plans, which set fixed benefit amounts instead of contracting with providers, to be sold on the ACA marketplace for the first time. Sidecar Health, an insurer that already sells network-free coverage to employers, has said it intends to enter that market.
“Employers tend to be the tip of the spear of innovation in this market, because they’re much more focused on it from a cost perspective,” Sidecar’s CEO, Patrick Quigley, told Becker’s, while cautioning against reading the moment as a wholesale collapse of the provider network.
“It’s not that tomorrow all networks are gone. Absolutely not,” he said, while noting that the wider affordability pressure employers are facing is helping to foster a growing acceptance among consumers and providers of coverage models that bypass the middleman.
For all the experimentation, most employers are not asking for the traditional network to disappear either. KFF found that companies remain largely satisfied with their networks, with 92% saying in 2025 that their largest plan offers timely access to primary care and 89% saying the same for specialty care, though only 70% felt that way about mental health.
The network is also entrenched in law. Federal and state adequacy rules still require insurers to maintain sufficient provider networks across most regulated coverage, from marketplace plans to Medicare Advantage to state-regulated commercial plans. The network-free models drawing the headlines live largely in the self-funded space, which ERISA exempts from state rules.
Incumbents, meanwhile, are moving to absorb the same tools rather than cede them. Anthem Blue Cross and Blue Shield in Indiana launched a designated orthopedic network this year that steers members to a small set of high-value providers and was described as a counter-offer to direct contracting. CareFirst BCBS is launching its own ICHRA model for employers across the Washington, D.C., region, and UnitedHealthcare’s Surest, a plan built around price transparency and no deductibles, has ranked among the insurer’s fastest-growing commercial products.
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