Navigating Health Insurance Options for Employers: Top Providers and Alternatives

Selecting or enrolling in health insurance is a critical decision for employers, individuals, and families. For small businesses without dedicated HR teams or benefits specialists, the process can feel daunting. However, investing time in researching and establishing a formal health benefit plan yields significant rewards, including enhanced employee retention, attraction, and a healthier, more satisfied workforce.

This article outlines the top 25 health insurance companies in the United States by market share and explores cost-effective, flexible alternatives to traditional group health plans, such as health reimbursement arrangements (HRAs) and health stipends.

Key Takeaways

• U.S. health insurers generated approximately $1.08 trillion in total net earned premiums in 2023.
• The largest health insurance companies dominate market share, reflecting financial stability and extensive provider networks.
• HRAs and health stipends offer flexible, affordable alternatives to traditional group health plans, particularly for small businesses.

Understanding Traditional Group Health Insurance

Traditional group health insurance involves an employer selecting a medical plan for their organization, offering coverage to employees and eligible dependents at a subsidized rate. Most insurers require a minimum participation rate of 70% to qualify for coverage. Failure to meet this threshold may prevent an employer from offering the plan.

Common Plan Types

• Health Maintenance Organizations (HMOs): Emphasize care within a defined network of providers.
• Preferred Provider Organizations (PPOs): Offer flexibility to use in-network or out-of-network providers, with cost differences.
• Exclusive Provider Organizations (EPOs): Require care from in-network providers, except in emergencies.
• Point-of-Service Plans (POS): Combine features of HMOs and PPOs, allowing out-of-network care at a higher cost.

Employees typically pay a portion of the premium and must meet an annual deductible before the insurer shares medical claim costs. Employers can purchase group health policies directly from carriers, licensed agents, brokers, or through the Small Business Health Options Program (SHOP) marketplace, which may qualify for the Small Business Health Care Tax Credit to reduce premium costs.

Cost of Group Health Insurance

According to the Kaiser Family Foundation (KFF), the average annual premiums for group health insurance in 2024 were:

• $8,951 for individual coverage, with employers contributing an average of $7,584.
• $25,572 for family coverage, with employers contributing an average of $19,276.

Despite its popularity, the high cost of group health insurance can be prohibitive for small businesses. Alternatives, such as individual health plans paired with HRAs, provide more affordable options.

Top 25 U.S. Health Insurance Companies by Market Share

Market share indicates a company’s portion of the health insurance market, reflecting its competitiveness, financial health, and provider network size. Below is a list of the top 25 U.S. health insurance companies by market share for 2023, based on data from the National Association of Insurance Commissioners (NAIC).

Rank	Company	Market Share 2022	Market Share 2023	Direct Written Premiums 2023
1	UnitedHealth Group (including UnitedHealthcare)	15.34%	16.37%	$248,763,012,672
2	Elevance Health Inc. (formerly Anthem)	7.16%	7.08%	$107,650,449,800
3	Centene Corp.	6.68%	6.76%	$102,711,951,802
4	Humana	6.03%	6.61%	$100,521,046,979
5	CVS Health (including Aetna Health)	5.82%	6.43%	$97,614,161,371
6	Kaiser Foundation (Kaiser Permanente)	6.18%	6.19%	$94,124,863,877
7	Health Care Services Corporation (HCSC)	3.53%	3.65%	$55,500,353,206
8	Cigna Health	2.39%	2.64%	$39,580,464,561
9	Molina Healthcare Inc.	1.99%	2.04%	$30,942,107,198
10	GuideWell (including Florida Blue)	1.84%	1.91%	$28,978,443,339
11	Independence Health Group Inc.	1.76%	1.85%	$28,166,663,550
12	Highmark Group	1.32%	1.32%	$20,065,837,533
13	Blue Cross Blue Shield of Michigan	1.11%	1.20%	$18,237,327,366
14	Blue Cross Blue Shield of New Jersey	1.11%	1.11%	$16,946,943,535
15	UPMC Health System	0.90%	0.95%	$14,401,481,471
16	Blue Cross Blue Shield of North Carolina	0.79%	0.82%	$12,436,855,017
17	Caresource	0.93%	0.77%	$11,772,153,985
18	Health Net of California, Inc.	0.63%	0.75%	$11,333,568,476
19	Local Initiative Health Authority	0.61%	0.73%	$11,103,818,952
20	Carefirst Inc.	0.70%	0.72%	$10,966,814,963
21	Metropolitan	0.69%	0.65%	$9,848,831,313
22	Blue Cross Blue Shield of Massachusetts	0.60%	0.61%	$9,310,416,288
23	Blue Cross Blue Shield of Tennessee	Not in top 25	0.61%	$9,294,215,169
24	Point32Health Inc.	0.63%	0.57%	$8,686,051,746
25	Health Net Community Solutions	Not in top 25	0.55%	$8,355,680,878

Note: Market share does not directly indicate product quality or service reliability but reflects a company’s market presence and financial stability. Larger market share often correlates with broader provider networks and higher direct written premiums.

Premium Trends

In 2023, U.S. health insurers collectively earned $1.08 trillion in net earned premiums, an 8% increase from $1 trillion in 2022, per the NAIC. UnitedHealth Group led with $248 billion in premiums, while Health Net Community Solutions, the smallest in the top 25, recorded $8.35 billion. Rising premiums are driven by inflation, worsening health conditions, and an aging population requiring more medical services.

Alternative Health Benefit Options for Small Employers

Rising premium costs and minimum participation requirements can make traditional group health insurance challenging for small and midsize businesses. Health reimbursement arrangements (HRAs) and health stipends offer flexible, cost-effective alternatives.

1. Individual Coverage HRA (ICHRA)

The ICHRA allows employers to reimburse employees tax-free for individual health insurance premiums and eligible medical expenses. Key features include:

• Flexibility: Suitable for businesses of all sizes with no contribution limits.
• Customization: Employers can set different allowance amounts based on 11 employee classes (e.g., full-time vs. part-time).
• Compliance: Satisfies the Affordable Care Act (ACA) employer mandate if designed with affordable allowances.
• Requirements: Employees must have a qualified individual health plan and attest to coverage monthly.

ICHRAs can replace or complement group health plans, offering employees choice in selecting policies that suit their needs.

2. Qualified Small Employer HRA (QSEHRA)

Designed for employers with fewer than 50 full-time equivalent employees (FTEs) who do not offer group health plans, QSEHRAs allow tax-free reimbursements for health insurance premiums and out-of-pocket medical expenses, such as mental health services and prescription drugs. Key features include:

• Eligibility: Must be offered to all W-2 full-time employees; part-time employees may be included with the same allowance.
• Coverage Requirement: Employees need minimum essential coverage (MEC).
• Contribution Limits: Subject to annual maximums set by the IRS.

3. Integrated HRA (Group Coverage HRA)

The integrated HRA, or group coverage HRA (GCHRA), supplements group health plans, reimbursing employees for out-of-pocket costs like deductibles and coinsurance (not premiums). Key features include:

• Eligibility: Only employees enrolled in the employer’s group health plan can participate.
• Customization: Employers can set allowances, deductibles, and cost-sharing amounts based on seven employee classes.
• Cost Control: Ideal for employers offering high-deductible health plans (HDHPs) to reduce premiums.

4. Health Stipend

Health stipends provide a taxable allowance for employees to spend on medical expenses, including insurance premiums and out-of-pocket costs. Key features include:

• Flexibility: No contribution limits or strict regulations, making them easy to administer.
• Taxation: Considered wages, subject to income tax.
• Limitations: Do not satisfy the ACA employer mandate for applicable large employers (ALEs), requiring a group plan or ICHRA to avoid penalties.

Simplifying Benefit Administration with PeopleKeep

Administering HRAs or health stipends can be streamlined with platforms like PeopleKeep, which offers software to manage benefits efficiently. PeopleKeep automates tasks such as reimbursement reviews and plan document updates, ensuring compliance and reducing administrative burdens. Their team provides expert support to design and manage customized benefit plans, making it easier for small businesses to offer competitive health benefits.

Conclusion

While traditional group health insurance remains a popular choice, its high costs and participation requirements can be challenging for small businesses. HRAs and health stipends provide flexible, affordable alternatives that empower employees to choose plans that meet their needs. By partnering with a benefits administration platform like PeopleKeep, employers can simplify the process and enhance their compensation packages, fostering a healthier and more engaged workforce.

For employers exploring HRAs or stipends, tools like PeopleKeep can help design and manage these benefits effectively, ensuring compliance and employee satisfaction.