Executive Summary: Designing a Whole Person Benefits Strategy Around a Level Funded Core: What the Best Small Employers Do Differently

LFP-11.09 — Benefits Architecture

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The best small employers do not assemble benefits by accretion. They design a benefits architecture where the level funded plan is the risk-bearing core and each ancillary component is selected and configured for the specific population the plan covers.

Five principles distinguish this approach: population specificity, where each component is chosen for the actual workforce rather than a generic package; integration over addition, where each component connects to the level funded core in a way that produces analytical or cost management value; measurable value over marketing claims, where each component is evaluated on documented cost or clinical impact; tax-advantaged design, where HSA, HRA, and FSA are configured as plan design tools; and total cost awareness, where benefits are tracked as total cost against total value rather than as a checklist.

Three employer configurations illustrate how these principles apply differently to different populations.

The 15-person high-income professional services firm runs an HDHP with HSA, employer contributions at 50 to 75 percent of the deductible, structural DPC integration with the plan design adjusted to reflect primary care outside the deductible, a transparent PBM, and behavioral health telehealth with lower copay than in-person visits. Dental and vision are carved out for network breadth. There is no wellness platform; the budget goes to condition-specific disease management for identified chronic conditions.

The 25-person mixed-income employer runs a moderate deductible plan because low-income employees cannot absorb high cost sharing. An income-adjusted HRA provides $1,500 in funding for hourly workers earning under $50,000 and nothing for management employees earning over $80,000. Dental is bundled to increase take-up among lower-income members. Vision is voluntary. Telehealth carries a copay incentive to route appropriate cases away from in-person care. SDOH screening is integrated into wellness visits with community resource navigation. There is no DPC.

The 30-person blue-collar trades employer runs a low deductible plan because high deductibles produce care avoidance in populations that already underuse healthcare. Dental and vision are both bundled because tangibility drives retention in a competitive trades labor market. An MSK pathway covers virtual physical therapy, surgical second opinions, and return-to-work coordination for the dominant cost driver in a physically demanding workforce. An employer-funded HRA covers prescription drug cost sharing to reduce medication nonadherence. There is no HSA.

The three configurations share design principles but differ in every specific component. Benefits architecture is population-specific, and the broker who designs for the actual workforce rather than presenting a standard package is the one whose advisory relationship is worth paying for.