“Healthcare has moved beyond being a perk and is now a foundational part of an employee’s financial security,” observes Casey Strunk, president of Strunk Insurance Group. While employers may frame it as a recruiting and retention tool, he finds employees experience it as protection against catastrophic financial risk when a serious medical event occurs.
In fact, Will Spong, managing director of Employee Health & Benefits, Arizona, at Marsh McLennan Agency, puts it baldly: “Healthcare benefits have never been more important.” This is true for the employer as well as the employee, he explains: With inflation straining household budgets, medical coverage directly affects an employee’s monthly cash flow and family decisions. “As a result, healthcare has become central to total compensation, influencing retention, turnover and a company’s ability to attract top talent.”
How are rising healthcare costs increasingly shaping hiring outcomes? Strunk explains, “When the employee share of cost erodes take-home pay, compensation loses its meaning and hiring slows, even when wages are competitive.”
However, company size is a factor in these calculations. And flexibility is where large companies and small to midsize businesses most commonly differ. “Larger employers tend to have more room to maneuver when costs rise,” Spong explains, noting they may have additional structural options available to adjust plan design or manage volatility over time. “Smaller employers, meanwhile, can feel the impact of premium increases more intensely.”
Notes Strunk, “Large employers benefit from scale and stability. A broader risk pool allows them to absorb high-cost claims with far less disruption, while smaller employers can be forced into frequent plan changes when a single catastrophic diagnosis materially alters costs.”
He finds healthcare affordability often becomes a growth constraint for small and mid-sized businesses before it is recognized as a benefits problem. “The pressure shows up first in stalled hiring and reduced participation, not on a renewal spreadsheet.”
Among solutions for smaller businesses, Spong points to creative strategies that allow them to gain more visibility into costs and more control over how dollars are spent. He notes that, while many smaller organizations feel tied to fully insured arrangements, alternative approaches such as level-funded or partially self-funded arrangements with stop-loss protection can introduce shared risk and greater cost transparency. “With actuarial modeling to guide those decisions, employers can access many of the financial advantages of self-funding without taking on full exposure, ultimately putting more dollars into the employer’s and employees’ pockets through better benefits, lower costs or both.”
What Employees Actually Value in Health Benefits
Noting that employees evaluate health benefits based on the cost to use care, not the cost to enroll, Strunk says, “Plans that appear affordable on paper can feel inaccessible when high out-of-pocket expenses surface at the point of care.” This is why health benefits most often fail at the moment of use, not enrollment. “Coverage does not equal preparedness, and employees frequently enter care without understanding pricing variation, administrative requirements, or financial exposure.”
Emphasizing that understanding drives value, Strunk says, “Benefits only work when employees can make informed decisions, access guidance, and have real conversations about how coverage aligns with their needs and financial reality.”
Spong notes another outcome of employees paying closer attention to what their healthcare coverage actually costs them and how usable that coverage feels in real life: “When out-of-pocket expenses rise or access feels limited, it can influence how people think about their employer and whether they begin looking elsewhere.”
Observes Strunk: “As organizations grow, benefit experiences often become more transactional. The loss of education and human interaction can make even well-designed plans feel distant or confusing to employees.”
The Most Important or Popular Elements of Healthcare Benefits Today
“Behavioral health support is one of the clearest shifts we’re seeing,” says Spong. He finds employees are asking more and more for mental health coverage and access to therapy, and financial well-being is increasingly part of that same conversation. It’s part of an overall picture he describes: As healthcare costs, deductibles and out-of-pocket expenses rise, financial stress directly affects overall well-being, making both mental and financial wellness support essential components of a competitive benefits package.
Telehealth continues to hold strong appeal as well, according to Spong — for both employee and employer. For an employee balancing work and family responsibilities, being able to connect with a provider quickly, without disrupting an entire workday, makes a real difference. And from an employer standpoint, that access can reduce missed time and support overall productivity.
Spong cites concierge healthcare navigation as another service gaining momentum, explaining, “The system can be complex, especially during a major procedure or a large bill. Employees often need help reviewing benefits and making sense of what they owe.” A dedicated advocacy or concierge service gives them someone to call who can walk through those details and help resolve issues along the way.
Spong points out that larger organizations may have more immediate capacity to roll out these services across multiple plan tiers, while smaller employers tend to adopt them thoughtfully, weighing impact against cost. However, he notes, “In both cases, the conversation ultimately comes back to managing rising expenses while offering benefits that employees genuinely value and use.”
Differences between Large Employers and Small and Mid-Sized Businesses
Strunk finds large employers increasingly focus on enhancing the overall benefit experience, while small and mid-sized businesses are often focused on whether they can continue offering benefits at all. “Cost pressure hits smaller employers faster because premiums rise more quickly than wages,” he explains. “When employer contributions fail to keep pace, employee costs can spike disproportionately, leading to reduced participation and adverse selection.”
Another layer of strain comes from compliance obligations because, he points out, many employers underestimate the ongoing responsibility tied to sponsoring a group health plan until regulatory pressure becomes unavoidable.
Noting that transparency and control over healthcare spending are standard expectations for large employers, Strunk observes, “Smaller employers often assume those capabilities are out of reach, even though the barrier is frequently perception rather than size.”
Changes Shaping Employer Healthcare Conversations
Spong sees affordability continuing to shape the conversation. According to Marsh McLennan Agency’s “2026 Employee Health & Benefits Trends” report, employers are facing the highest benefit cost increase in 15 years, with 62% of projected 2026 healthcare cost growth since 2017 driven by compounding price increases. “But that pressure,” Spong says, “is being felt on both sides of the equation.”
He expects employers across all size segments will evaluate alternative funding strategies, pointing out that organizations have more options than ever, from self-funding to captives to level-funded arrangements, as traditional fully insured models continue to face ongoing strain.
Strunk has observed increased employer interest in Individual Coverage Health Reimbursement Arrangements, driven by sustained double-digit increases and reflecting fatigue with traditional cost trajectories. However, he says, “While ICHRA models offer budget certainty for employers, they shift complexity and network limitations onto employees, redefining what employer-sponsored coverage actually means in practice.”
Strunk sees the gap between large and small employers continues to widen, observing, “Strategic HR teams are investing in better benefit experiences, while smaller employers are focused on maintaining access in an increasingly constrained environment.”
Spong believes expectations around accountability will continue to rise as more employers explore the various alternatives. “Leaders will need to show that cost increases are being managed intentionally and with employee impact in mind.” Specifically, he says transparency and education will matter just as much as the coverage itself.
Says Spong, “Employers that stay proactive, evaluate their options regularly and remain flexible in how they structure their funding approach, while maintaining focus on both cost discipline and employee experience, will be better prepared to navigate continued market pressure.”
How Does This Analysis Manifest for Our Local Business Community?
Valleywise Health: hospital and healthcare system
Observing that medical insurance remains the most important employee benefit across industries, President and CEO Steve Purves notes that its importance is even more pronounced in healthcare organizations like Valleywise Health. “Employees don’t just view health coverage as a perk — it’s foundational to their financial security, well-being and overall ability to care for themselves and their families while delivering care to others,” he says. Nearly 80% of the organization’s benefits-eligible employees are currently enrolled in one of its medical insurance offerings.
“For Valleywise Health, comprehensive and accessible medical insurance directly supports our mission,” Purves says. “When caregivers and staff feel secure about their own healthcare, they are better positioned to deliver high-quality, compassionate care to patients throughout the communities we serve.” The elements employees value most are lower cost share at time of service (e.g., deductibles, coinsurance, etc.), provider availability (broad national networks) and opportunities to reduce paycheck contributions through healthy behaviors by participating in wellness activities. “Over 40% of the employees who are engaged in our wellness platform achieve a status that qualifies them for our medical contribution discount, reflecting a strong engagement in our wellness programs.”
Valleywise completes an extensive benchmarking exercise each year to ensure its benefit offerings are competitive and align with the needs of its employees and their families. The organization focuses on fiscal responsibility, competitive plan design, and creative as well as engaging opportunities to participate in its robust wellness platform. Noting that each year, Valleywise anticipates changes that align with these goals, Purves shares, “We’re continuing our current benefit offerings while enhancing how employees access and experience them.” Rather than introducing entirely new programs, he explains, the focus is on increasing access to care, expanding telemedicine options, strengthening well-being resources, and providing more intentional education around the full picture of well-being — physical, psychological, social, and financial. “The goal is simple: Make it easier for employees to get the right support at the right time.”
Blue Cross Blue Shield of Arizona: nonprofit health insurance company
“Affordability and access are at the center of how employers think about health benefits today, especially as workforce models and employee expectations continue to evolve,” says President and CEO Pam Kehaly, noting, “In a changing healthcare landscape, onesizefitsall solutions no longer work.”
With flexibility a central focus, AZ Blue offers benefit options that adapt to employers’ size, workforce needs and longterm goals. Kehaly points out these include medical, pharmacy, dental and vision coverage across fully insured and selfinsured models, with plan designs that balance cost, choice and access to care. “As an Arizonabased health plan serving Arizonans,” Kehaly says, “we combine strong statewide networks with access to the Blue’s national participating provider network, helping employers support their people wherever they live and work.”
Prosano Health is an innovative model AZ Blue launched, first to its employees in January 2023 and then with broader, employer-sponsored plans and public access a year later. It represents what Kehaly describes as one of the organization’s most important shifts: bringing coverage and care closer together. “When coverage and care work together, people are better supported,” she says. “They get answers sooner, understand their options more clearly, and are less likely to delay care. That creates a more consistent experience for patients and gives employers greater confidence that their benefits are working the way they should.”
Prosano combines health insurance with access to dedicated care teams who focus on primary care, preventive services, short-term counseling and ongoing care for chronic conditions. Members can access care in person or virtually, with no or low out-of-pocket costs. Kehaly cites data — comparing 2024 group members who received care through Prosano Health providers for care and navigation with group members using other providers — that support her optimism: 37% fewer emergency room visits, 7% fewer acute hospital admissions and 35% fewer specialist visits. The combination of more connected care and easier access has earned Prosano Health a Net Promoter Score of 95.
“Beyond Prosano, we continue to focus on plan designs and network options that support affordability and access — giving employers flexibility to offer coverage that works for their workforce while remaining sustainable over time,” Kehaly says. “We’re continuing to evolve how health insurance works in practice — by designing benefits that are simpler to use, easier to manage and better aligned with how people access care today.”
Kehaly points to expanding Health Savings Account options, including those that integrate with care models like Prosano Health, as among approaches that give organizations greater flexibility in how benefits are structured and financed, while supporting access to care and more predictable longterm costs. Additionally, she says AZ Blue is also evolving its networks and plan options, so employers can choose what best fits their priorities — whether that’s broader access, more localized networks or designs that better reflect how care is actually accessed.
“Affordability remains central to this work,” Kehaly says. She notes healthcare is changing fast, costs are climbing, new treatments and technologies are arriving with higher price tags, and government policy continues to shift. “It’s one of the toughest environments we’ve ever faced —but protecting people when the unexpected happens is exactly what AZ Blue is built to do.”
Says Kehaly, “Much of our work happens behind the scenes, from plan design to care delivery to how coverage is structured, all with a focus on driving greater value for members and the organizations that support them. At the same time, we’re making benefits easier to understand and use through tools that help people make more informed decisions.”
Delta Dental of Arizona: health and wellness company providing dental and vision insurance
“When we talk about the options we offer, I like to start by saying that Delta Dental of Arizona is about more than insurance products,” says President and CEO Michael Jones. Noting the organization’s mission is to create a path to better health and wellness, and its vision is healthier lives for everyone, he says, “That perspective really guides how we think about affordability, access and the work we do in our communities.”
Delta Dental recognizes that, for employers, providing benefits “is about more than just checking a box; it’s about supporting the overall health of their employees,” Jones says. For small and growing businesses, that means plans that are affordable, flexible and easy to manage. Dental coverage includes routine care, major services and optional orthodontics; DeltaVision® plans cover exams, glasses and contacts. Jones cites predictable rates, dedicated support and smooth onboarding as factors that make it easy for employers to get started, and plan designs that allow solutions to grow with businesses as they grow or have multiple locations. “We offer flexible plan designs — PPO, DHMO and ASO — that can be customized for diverse teams across multiple sites. Bundling dental and vision coverage allows employees to take care of their health more conveniently, while helping employers provide a benefits package that really supports whole-person wellness.”
Jones believes that what really stands out about Delta Dental’s offerings is how they bring together innovation, access and affordability to support whole-person health. “Through the Delta Dental of Arizona Foundation, we invest in programs that improve oral health education, integrate dental care with medical care and support broader wellness initiatives, like improving food security across the state. Partnerships with organizations like the University of Arizona and Banner Health Foundation help us extend care into settings where it can make a real difference,” he says.
He notes also the focus on making care accessible for everyone, pointing out the Special Health Care Needs dental benefit provides additional cleanings, visits and treatment accommodations for members with qualifying needs. “This helps ensure dental care is comfortable and achievable for people who might otherwise face barriers.”
Another program he points to is One & Sun, designed to make preventive care engaging and rewarding: DeltaVision members who complete an annual eye exam receive a free pair of designer sunglasses, encouraging regular vision care that supports overall health. “For small businesses, initiatives like this offer meaningful wellness incentives without extra complexity. Larger or multi-location employers can integrate them into scalable programs that reach diverse workforces,” Jones says.
Noting that Delta Dental’s focus across every portfolio, product and program is on making healthy habits easier and more meaningful and helping individuals, families and communities live healthier lives, Jones says changes this year include expanding coverage options so employers can offer comprehensive, affordable benefits packages. “We’re also exploring partnerships with local organizations to better integrate oral and vision health with overall care, driving meaningful improvements in health outcomes. At the same time, we’re investing in a digital transformation that will enhance how we serve our members and create new ways for them to access care, manage benefits and take an active role in their well-being.”
Cigna Healthcare: health insurance company
“We know that having a healthy workforce drives business success by improving productivity and reducing absenteeism,” says Pete Chuchro, general manager and market growth leader of Arizona at Cigna Healthcare. He notes that, as employers across Greater Phoenix continue to expand and compete for talent, healthcare has become more than a benefit — it is a defining part of how organizations support their workforce and fuel long-term success. “In a rapidly changing environment, affordability and access are no longer opposing forces; they are goals that must advance together,” he says.
“At Cigna Healthcare, we believe the future of employer-sponsored healthcare is rooted in flexibility, transparency and whole-person support,” Chuchro says. He finds employers today are asking smarter questions — not just about price, but about value — as they seek solutions that meet employees where they are, adapt as businesses evolve and deliver measurable outcomes that support productivity and well-being.
Describing choice as foundational, Chuchro cites the broad spectrum of medical, pharmacy, behavioral health and wellness solutions Cigna offers employers that are designed to scale with their needs. Noting that large organizations often seek advanced strategies that use data and insights to better manage costs while improving the employee experience, Chuchro says, “We’re proud of our innovations in digital technology to help our customers focus on care, not the paperwork.”
For small and mid-sized businesses, Cigna’s vision is equally ambitious, though it sees simplicity, predictability and access being what matters most. And geography adds another dimension, says Chuchro, differentiating between Arizona-based businesses, which often prioritize local access and trusted provider relationships, and companies with multiple locations, which require consistency across markets.
Noting that Cigna is “the only health benefits provider to offer live 24/7/365 customer support, and the only health plan to offer immediate access to a behavioral health clinician,” Chuchro sees innovation continuing to accelerate this transformation. “By combining local market insight with data-driven solutions, we can connect employees to the right care at the right time — supporting chronic-condition management, improving health equity, and strengthening outcomes across our communities.”
Chuchro believes the future of healthcare for Arizona’s business community will be defined by partnership and purpose. “Even in a volatile market, employers are not powerless,” he says. “When employers, health plans, providers and community leaders align around shared outcomes, affordability and access become achievable — not aspirational. By staying focused on whole-person health, local collaboration and solutions that evolve with the workforce, we can help ensure that Arizona’s businesses remain competitive, resilient and positioned for growth — today and for generations to come.”
