Fact vs. fiction: Health benefits strategy misconceptions

By understanding the facts around these misconceptions, you can make smarter health care choices that may improve both bottom line and satisfaction.

While health care costs remain an important consideration, offering robust benefits packages that support whole-person health needs are critical to attracting and retaining employees and may lead to better overall health outcomes and lower costs over the long-term. In fact, employers are seeking out expanded benefits, adding services related to reproductive health, addressing weight loss and more.¹ While offering more can cost more at the onset, higher employee satisfaction and a healthier, more productive workforce may ultimately drive an ROI that makes it worthwhile.

Among surveyed employees who felt supported by a robust health and well-being benefits package, 83% were more productive at work and 67% planned to stay with their employer because of it.²

What about controlling costs? To balance the expense of offering a more robust benefits package, employers can look at other ways to help manage costs like evaluating different network strategies and working with a carrier that can help navigate and empower employees to make more appropriate and cost-effective care choices.

Network discounts are often used in traditional analyses by brokers or consultants to compare costs across different carriers, but doing so may shortchange employers in the long run. That’s because it doesn’t account for how a carrier’s solutions and programs work to help manage utilization costs, which may be a major contributor to overall health spend. As a result, employers may not have a complete picture when evaluating carriers. This incomplete view often means they miss potential savings generated from programs, such as site-of-care redirection, payment integrity solutions and inpatient management.

Dive deeper: An independent actuarial analysis commissioned by UnitedHealthcare and completed by Milliman in March 2026 has found that UnitedHealthcare’s total cost of care was more than 11% lower than national benchmarks, and up to 17% lower in certain regions.³ 

While wellness programs have become a popular health benefit, offering nutrition and fitness counseling, stress management, weight-loss programs and other lifestyle coaching, HR benefits professionals can find the ROI difficult to measure. The idea is that wellness programs can support employees in leading healthier lives, leading employers to see improved employee satisfaction and productivity, which can contribute to lower costs of doing business.

For example, the Employee Assistance Program (EAP) available to UnitedHealthcare members led to a 46% reduction in employee absenteeism at work.⁴ This can translate to estimated cost savings of $4,080 per full-time employee and $2,040 per part-time employee on average.⁵

Take note: An employer’s investment in wellness programs may not go as far if effort isn’t put into promoting them and encouraging employee participation. Consider ways to ensure employees are aware of available wellness programs with regular reminders and incentives for those who are engaged in the programs. These best practices may help.

Looking across an employer’s population and selecting benefits that work for the masses may seem like the best path to take, but the reality is this could leave certain segments of the population unsupported and feeling dissatisfied. Plus, even a small subset of a population can have an outsize impact on an employer’s overall health spend.

Take diabetes, for example. If just 1 employee within a given population has diabetes, that can equate to $14,000 in average annual medical costs, according to UnitedHealthcare data.⁶

It’s critical to understand the nuanced needs across an entire population, taking into account the variance in generations, life stages, gender, race and ethnicity, among others, to determine which products, solutions and programs may be added to the mix as options for employees to enroll or participate in.

Worth noting: Due to budget constraints, it’s likely not feasible that an employer will be able to offer everything an employee or their family member may find valuable. Brokers, consultants and carriers can help advise on the solutions that may have the greatest potential to deliver value. Hint: Focus on solutions aimed at tackling the biggest cost drivers, even if it would only benefit a small number of individuals.

It’s no secret that health care is expensive, and some may believe that health insurance companies are raising their rates or premiums to make a bigger profit. But the reality is that for-profit health insurance companies only make 2.4% in net profit.⁷ Outside of that, 80 to 85% of every health plan dollar is required to be spent on medical care, with the rest going toward administrative and business operating costs.⁸

Said another way: While the vast majority of health plan costs go toward medical services, with for-profit health insurers only making a small percentage of net profit, it's that net profit that enables investments in efforts and initiatives that drive better health outcomes, lower costs and simpler experiences. Health insurers like UnitedHealthcare can also help by spreading costs across a large group so no one pays the full price alone, negotiating for lower service and drug costs, helping ensure claims are processed and paid accurately, supporting more effective care coordination and management and driving innovation.