Elevance Health Plans Deliver More Predictable, Lower Healthcare Costs for Small Businesses
HealthTech / Employee Benefits | 5 min read
Small businesses are the backbone of the US economy — yet when it comes to healthcare, they have always operated at a structural disadvantage. They lack the scale to self-insure, the negotiating power of large employers, and the administrative infrastructure to manage the complexity of group health plans. The result: their employees pay more, their costs are harder to predict, and the benefits they can offer are less competitive than those at larger organisations. Elevance Health's affiliated health plans have announced two solutions specifically designed to close this gap — Balanced Funding and Multiple Employer Welfare Arrangements (MEWAs) — each targeting a different structural barrier that prevents small businesses from achieving the cost stability, risk protection, and preventive care access that their larger counterparts take for granted. Against a backdrop of 26% healthcare cost increases for small businesses over the past five years, the commercial urgency of both solutions is clear.
The Small Business Healthcare Problem: Scale Without Safety
The fundamental challenge for small and mid-size employers is not that they do not want to provide good healthcare — it is that the risk economics of traditional fully insured plans are stacked against them. A small employer with 50 employees cannot diversify healthcare risk the way a company with 5,000 can. One employee with a serious diagnosis can materially shift annual healthcare costs in a way that would be statistically absorbed in a large employer's risk pool but creates a real financial shock for a smaller one. Fully insured plan premiums are set to account for this risk concentration — and they carry additional taxes and fees that add cost without adding coverage value. For small business owners trying to offer competitive benefits in a tight labour market, the unpredictability of healthcare costs is as damaging as the level itself: it makes budgeting unreliable and forces organisations to either overpay for protection or underinsure their people.
Balanced Funding: Predictability With a Return Mechanism
Balanced Funding is designed as an alternative to traditional fully insured plans — combining the predictability of a fixed monthly payment with the financial upside that fully insured models never offer. Employers pay a fixed amount each month, with built-in safeguards that cap financial risk if employee healthcare costs run higher than expected. But critically, when employee healthcare costs come in lower than anticipated, employers may receive money back. This bidirectional financial structure creates what Elevance Health describes as a shared incentive for prevention and early care: both the employer and the health plan benefit when employees access preventive services, manage chronic conditions proactively, and avoid the high-cost acute interventions that drive claims. The model also avoids some of the taxes and fees associated with traditional fully insured plans — a meaningful cost reduction that compounds over time. Monthly financial and employee health reporting gives employers visibility into the cost drivers — hospital and prescription drug costs chief among them — allowing them to understand where their spend is concentrated and take informed action rather than treating healthcare as an opaque line item.
"Small businesses are navigating significant cost pressures, and healthcare is often one of their largest expenses. Our Balanced Funding and MEWA solutions are designed to give employers greater cost stability, shared risk protection, and tools that support preventive care. When costs are more predictable and employees stay healthier, businesses are better positioned to grow and compete."
— Morgan Kendrick, EVP and President, Commercial & Specialty Business, Elevance Health
MEWAs: Pooled Risk at Proven Scale
Multiple Employer Welfare Arrangements address the scale problem directly: by pooling multiple small and mid-size employers together under a shared benefits structure, MEWAs give participating organisations access to risk diversification and purchasing power that none of them could achieve individually. For a business with 30 employees, joining a MEWA effectively means their risk is spread across thousands of covered lives — transforming the healthcare risk economics from a small-employer problem into a large-employer advantage. Elevance Health's affiliated health plans have been operating MEWAs at meaningful scale for years, and the data on outcomes is concrete. In Kentucky, the affiliated health plan's partnership with the Kentucky Chamber — now in its fifth year — has 4,200 participating employers statewide and an estimated $400 million in savings since the programme's inception. In Ohio, through a partnership with the Southern Ohio Chamber Alliance now marking its tenth anniversary, the programme has generated an estimated $1.3 billion in employer savings and currently serves 94,000 Ohioans across the state. These are not modelled projections — they are programme-level outcomes with a decade of validation behind them.
"The ChamberAdvantage program has been transformational for organisations like ours. It allows us to provide high-quality health coverage for our employees at a cost that's sustainable for our mission. Lowering healthcare costs and having more stability is invaluable — and it's exactly what employers need to keep serving their communities."
— Tony Emberton, Financial Administrator, Potter Children's Home; Kentucky MEWA Board of Trustees
Digital Tools and Preventive Care: The Support Layer That Reduces Long-Term Cost
Both the Balanced Funding and MEWA programmes are supported by a digital access and care coordination layer that is operationally significant in the context of cost management. The Sydney Health app — available to employees enrolled in affiliated health plans — has saved users an estimated 1.5 million hours by making it faster and easier to find, compare, and access care. By enabling employees to compare care settings and understand cost implications before making care decisions, the app shifts healthcare navigation from a reactive, high-cost-default process to an informed, cost-sensitive one. Employees who understand the cost difference between an urgent care centre and an emergency room, or between in-network and out-of-network providers, make different choices — and at scale across thousands of covered lives, those different choices produce measurable reductions in total healthcare spend.
Preventive and primary care encouragement is woven through the programme design — reflecting a genuine commitment to reducing the long-term cost base by getting employees into preventive services and early interventions before conditions escalate into the high-cost acute care that drives the majority of healthcare expenditure in employed populations. For small employers, whose healthcare cost exposure is particularly sensitive to a small number of high-cost claims, preventive care investment is not simply a wellness benefit — it is a risk management strategy with a direct financial return in the context of how Balanced Funding and MEWAs are structured.
Key Takeaways
- • Small businesses have experienced healthcare cost increases of 26% over five years — Elevance Health's affiliated health plans are addressing this with two specifically designed solutions: Balanced Funding (fixed monthly payment with a return mechanism when costs are lower than expected) and MEWAs (pooled multi-employer risk structures that give small businesses large-employer scale economics).
- • Balanced Funding provides predictable monthly costs, built-in risk caps, potential money-back when employee costs run low, avoidance of fees and taxes associated with traditional fully insured plans, and monthly financial and health reporting — creating shared incentives around prevention and early care between employer and health plan.
- • MEWAs pool multiple small employers to achieve risk diversification and purchasing power equivalent to large-employer health plans; Elevance's Kentucky Chamber MEWA (5 years, 4,200 employers) has generated an estimated $400M in savings; the Ohio Southern Ohio Chamber Alliance MEWA (10 years) has generated an estimated $1.3B in savings for 94,000 Ohioans.
- • The Sydney Health app has saved users an estimated 1.5 million hours by enabling faster, more cost-aware care navigation — shifting employee decision-making toward lower-cost, in-network, preventive care settings that reduce total healthcare spend across the covered population.
- • Elevance Health serves approximately 104 million consumers through a diverse portfolio of medical, pharmacy, behavioural, clinical, home health, and complex care solutions — the scale and affiliated health plan network behind both the Balanced Funding and MEWA programmes provides the risk pooling depth and data infrastructure that makes these models viable for employers of any size.