Employers spend a fortune on health insurance. Health benefits are often their second-largest expense after payroll. Yet employers often make these purchases without knowing how their health plans function when employees need care.
Health insurance differs from other major purchases, in that payment doesn’t guarantee access. Employers and their workers pay frontloaded, expensive premiums only to find that when they attempt to use these benefits, their requests are denied or delayed. That experience isn’t just frustrating. It is a blind spot in how employer-sponsored benefits are selected and managed.
Employers choose plans without access to information on whether or not their employees will actually be able to use the care they pay for. Rising premiums have gotten the most press, but coverage rules increasingly determine the care that is delivered.
For decades, information that is essential to allow employers to evaluate plan performance—denial rates, authorization timelines, appeal outcomes—hasn’t been publicly shared. This is not proprietary information, but insurance companies nonetheless have balked at providing it. Employers have been left to compare premiums and benefit summaries, while the criteria that determine access to care have remained largely invisible.
That approach was barely tolerable in an era when costs were lower, and utilization controls were less tightly applied, but the system has reached a breaking point. Premiums continue to rise faster than wages, while coverage rules increasingly determine not just how much care costs, but whether it is delivered at all. Too often, the experience is that insurance that is bought and paid for only exists in theory; in practice, refusal to honor that coverage is too commonly the norm. Right now, employers lack even basic plan performance data: how often care is denied, how long approvals take, and the percentage of appeals that succeed. In any other major purchasing decision, those kinds of outcomes would be considered table stakes. Without transparency on this operational information, employers are effectively purchasing a black box—committing enormous resources to benefits whose real-world performance they cannot evaluate, benchmark, or improve.
Health benefits are a core part of compensation and risk management. Yet many companies lack transparency into how one of their largest line items is being delivered. Workers who think they are protected because they have insurance too often learn about coverage limitations when they are at their most vulnerable and need care, leaving them not just frustrated but with a sense of betrayal. They are left either to forgo recommended care or pay out of pocket, and those denials sting that much more because they’ve paid thousands of dollars in premiums. Imagine buying a new car and finding out that while the dealership was happy to take your money you aren’t able to drive it. When insurers refuse to cover care, they do more than erode patient confidence in insurers; they create a feeling of distrust that spills over to the employers who have made decisions about benefits on their behalf.
Price transparency efforts are still essential. The No Surprises Act was passed at the end of President Trump’s first term, which would require insurers to provide an estimate of the price of their care and what will be covered before care is scheduled. Unfortunately, thanks to Biden administration delays, we are still waiting for implementation of the Advanced Explanation of Benefits it promised. More legislation is needed. The Patients Deserve Price Tags Act, a bipartisan bill proposed by Senators Marshall and Hickenlooper, would require that real prices of patients’ care be made available prior to their care. Patients deserve this information.
But even the most engaged consumer lacks the leverage that employers have. More than 165 million people receive their health insurance coverage through their employers, and those employers in turn spend hundreds of billions of dollars each year providing these benefits. That scale gives employers the ability not just to select plans and approve their design, but to insist on accountability.
Employers need practical information that would be expected in any other major purchasing decision. Employees deserve coverage they can use when they need it, and employers deserve the information necessary to choose plans that actually deliver care. Full stop, we need price transparency. But we also need to be sure that employers know how—and if—care is being delivered. Patients deserve both.
For companies looking to control costs, support their workforce, and maintain trust, seeing how the health plans perform is not optional. It is basic governance. And in a system this expensive, buying blind is no longer a risk employers can afford to take.
About Monique Yohanan, MD, MPH
Monique Yohanan, MD, MPH, is a senior fellow at Independent Women, a physician executive and healthcare innovation leader, and Chief Medical Officer at Adia Health.
