Forward Looking on Syam Adusumilli

The Employment Relationship Is Fracturing: What It Means for Employer-Sponsored Health Coverage

Sun, 01 Mar 2026 00:00:00 +0000

The employer-sponsored insurance system in the United States was designed for a specific kind of worker: full-time, single employer, multi-year tenure. That worker is not disappearing, but the share of the workforce that fits the description is shrinking, and the shrinkage is not a pandemic artifact or a cyclical adjustment. It is demographic, technological, and economic in origin. The data is clear enough that anyone running a TPA, investing in benefits technology, or advising employers on coverage strategy should understand the scale, the trajectory, and the specific populations driving the change.

Executive Summary: The Employment Relationship Is Fracturing: What It Means for Employer-Sponsored Health Coverage

Sun, 01 Mar 2026 00:00:00 +0000

FWD.01 — The Changing Market
#

The employer-sponsored insurance system was designed for a full-time, single-employer, multi-year worker. That worker is not disappearing, but the share of the workforce fitting that description is shrinking in ways that are demographic, technological, and economic, not cyclical.

The BLS Contingent Worker Supplement published in November 2024, based on July 2023 data, found 7.4 percent of all employed workers were independent contractors on their sole or main job. The figure undercounts the professional independent workforce because the survey captures a single reference week. MBO Partners reports 72.9 million Americans working independently in 2025, including 5.6 million earning more than $100,000 annually, up 19 percent from 2024 and 86 percent from 2020. The fastest-growing segment of the independent workforce is high-income professionals choosing independence, not being forced into it. The United States had 30.4 million nonemployer businesses in 2023, generating $1.8 trillion in receipts. Nonemployer business formation has outpaced employer business formation in almost every year since 2012. New business applications hit a record 478,800 per month in 2025, more than four times the pre-2020 average.

ICHRA, ACA Markets, and Level Funded: Three Models in Search of a Strategy

Sun, 01 Mar 2026 00:00:00 +0000

The three coverage models that dominate the small employer benefits conversation, Individual Coverage Health Reimbursement Arrangements, ACA marketplace plans, and level funded arrangements, are routinely discussed as if they sit on a spectrum from simple to complex, or cheap to expensive, and the employer’s job is to pick their spot on the line. They are not on a spectrum. They are structurally different responses to different problems, with different risk allocations, different information architectures, and different implications for the TPA’s role. Most of the confusion in the market, and most of the bad product strategy decisions at TPAs, comes from treating them as interchangeable options rather than as distinct architectures. The expiration of the ACA’s enhanced premium tax credits on January 1, 2026 has made the structural differences sharper and the strategic stakes higher.

Executive Summary: ICHRA, ACA Markets, and Level Funded: Three Models in Search of a Strategy

Sun, 01 Mar 2026 00:00:00 +0000

FWD.02 — The Changing Market
#

Level funded, ICHRA, and ACA marketplace coverage are not interchangeable options on a spectrum from simple to complex. They are structurally different responses to different problems with different risk allocations, different information architectures, and different implications for the TPA’s role. Most bad product strategy decisions at TPAs come from treating them as the same thing at different price points.

The Micro-Employer Problem: Why 1 to 10 Lives Is the Hardest and Most Important Market in Small Group Benefits

Sun, 01 Mar 2026 00:00:00 +0000

TPAs that serve groups of 1 to 10 employees do not need to be told that the economics are brutal. They know what it costs to onboard a 4-person accounting firm. They know the stop loss carrier’s pricing at that size. They know the broker brought the group because the same broker brings a 75-person manufacturer, and declining the small group risks the large one. What operators in this segment do not have is the answer to three questions that will determine whether the micro-employer segment is a permanent relationship cost or a future profit center: how fast the micro-employer population is growing and what that does to a TPA book where micro-groups are currently subsidized by larger accounts; whether reinsurance at the pool level, not stop loss at the group level, changes the actuarial math enough to make pooled micro-employer products viable; and what the actual administrative cost floor looks like if the quoting, eligibility, and stop loss reporting processes are automated. The answers are not obvious in either direction.

Executive Summary: The Micro-Employer Problem: Why 1 to 10 Lives Is the Hardest and Most Important Market in Small Group Benefits

Sun, 01 Mar 2026 00:00:00 +0000

FWD.03 — The Changing Market
#

There are approximately 4.9 million employer firms in the United States with fewer than 10 employees, representing 78.5 percent of all employer firms. New business applications are running at a record 478,800 per month in 2025, more than four times the pre-2020 average. The 55 to 64 cohort forms businesses at 0.38 percent of the adult population monthly, higher than any younger cohort, and these businesses land disproportionately in the 1 to 10 employee range. A TPA whose book moves to 30 percent micro-groups by count without a corresponding improvement in per-group economics is subsidizing a growing share of its book from a stable or shrinking share of profitable accounts. Every TPA in this segment should be modeling this ratio.

The Fractional Worker Coverage Gap: A Market Nobody Has Solved

Sun, 01 Mar 2026 00:00:00 +0000

The fractional worker is the person the employer-sponsored insurance system was not designed for and has no mechanism to serve. Not the gig worker, who has attracted political attention and platform-sponsored benefit experiments. Not the part-time employee, who has one employer relationship and may qualify for coverage. The fractional worker earns real income from multiple employers or clients, none of whom represents a majority of their earnings, and none of whom offers group health benefits. This population is large, growing fast, earning well, and buying coverage on the individual market at full price because the system has no other place to put them. The coverage gap is not an oversight. It is a direct consequence of how ERISA, the ESI system, and the ACA marketplace are structured. Solving it requires either a new product category, a regulatory change, or both.

Executive Summary: The Fractional Worker Coverage Gap: A Market Nobody Has Solved

Sun, 01 Mar 2026 00:00:00 +0000

FWD.04 — The Changing Market
#

The fractional worker is the person the employer-sponsored insurance system was not designed for and has no mechanism to serve. Not the gig worker, who has attracted political attention, and not the part-time employee with one employer relationship. The fractional worker earns real income from multiple employers or clients, none of whom represents a majority of their earnings, and none of whom offers group health benefits. LinkedIn profiles mentioning “fractional” alongside C-suite titles jumped from approximately 2,000 in 2022 to over 110,000 by late 2024. The number of fractional leaders roughly doubled from 60,000 to 120,000 between 2022 and 2024. Average hourly rates range from $175 to $300, with retainers of $5,000 to $16,000 per month per client. Annual incomes of $120,000 to $360,000 are common. This is not the low-income gig economy coverage gap. It is a high-income, high-skill, high-growth population structurally excluded from group health coverage despite having the income and sophistication to be excellent customers for it.

Business Choices for TPAs at the Inflection Point

Sun, 01 Mar 2026 00:00:00 +0000

This document does not make recommendations. It frames choices. The people reading it know their own capital structure, their own team, their own broker relationships, and their own risk tolerance. What follows is a set of structural questions and genuine strategic alternatives, informed by the market data in FWD.01 through FWD.04, designed to make the leadership conversation that follows more honest than it would otherwise be.

The Market You Are In Today
#

The level funded market is substantial and growing. The KFF 2025 Employer Health Benefits Survey found that 37 percent of covered workers at firms with 10 to 199 employees are in level funded plans, a share that has held steady over the past two years. Sixty-seven percent of all covered workers are in self-funded plans of some kind, including 27 percent at small firms and 80 percent at large firms (KFF, “2025 Employer Health Benefits Survey”). Enrollment in the fully insured medical market has dropped nearly 17 percent since 2019 as employers migrate to self-funding (Oliver Wyman, “Stop-Loss Market Update 2025”). The direction of the market is toward employer-borne risk with stop loss protection, not away from it.

Executive Summary: Business Choices for TPAs at the Inflection Point

Sun, 01 Mar 2026 00:00:00 +0000

FWD.05 — The Changing Market
#

The level funded market is substantial and growing. The KFF 2025 Employer Health Benefits Survey found 37 percent of covered workers at firms with 10 to 199 employees in level funded plans and 67 percent of all covered workers in self-funded plans of some kind. Fully insured medical market enrollment has dropped nearly 17 percent since 2019. The stop loss market reached $39 billion in premium in 2024, up from $31.6 billion in 2022. The direction is toward employer-borne risk with stop loss protection. Loss economics within that growth are deteriorating: loss ratios worsened from 81.6 percent in 2019 to 86.0 percent in 2024, and million-dollar-plus claims are rising steeply.

The AI-First TPA: What a Ground-Up Architecture Would Actually Look Like

Sun, 01 Mar 2026 00:00:00 +0000

Every TPA in the level funded market is running technology that was built for a world that no longer exists: patched to handle requirements the original architects never anticipated, integrated with external systems through custom connections that break when either side updates, and maintained by people who understand either the technology or the benefits domain but rarely both. The result is not a software quality problem. It is a business knowledge problem expressed in code. Building something better requires understanding the domain first and the technology second. What follows describes the component architecture that would result if both were understood simultaneously. What AI can do inside this architecture today, and when the rest will be ready, is the subject of FWD.07.

Executive Summary: The AI-First TPA: What a Ground-Up Architecture Would Actually Look Like

Sun, 01 Mar 2026 00:00:00 +0000

FWD.06 — The Changing Market
#

Every TPA in the level funded market is running technology built for a world that no longer exists: patched to handle requirements the original architects never anticipated, integrated with external systems through custom connections that break when either side updates, and maintained by people who understand either the technology or the benefits domain but rarely both. Three structural failure categories drive this.

What AI Can Actually Do for TPA Operations Today

Sun, 01 Mar 2026 00:00:00 +0000

The AI conversation in the TPA market has two failure modes. The first is vendor marketing that labels any automation “AI-powered” regardless of whether a model is involved. The second is architecture documents (including FWD.06 in this series) that describe what AI could do in a purpose-built system without addressing what it can do in the systems a TPA is actually running. This article takes each core TPA business process in sequence, gives the honest assessment of what is deployable now, what is buildable with investment, and what remains marketing language ahead of actual capability. The result is a decision framework for a leadership team allocating budget this year and next year.

Executive Summary: What AI Can Actually Do for TPA Operations Today

Sun, 01 Mar 2026 00:00:00 +0000

FWD.07 — The Changing Market
#

The AI conversation in the TPA market has two failure modes: vendor marketing that labels any automation “AI-powered” regardless of whether a model is involved, and architecture documents that describe what AI could do in a purpose-built system without addressing what it can do in the systems a TPA is actually running. Three tiers resolve both.

Synthesis: Who Builds the Benefits Infrastructure for the Future of Work?

Sun, 01 Mar 2026 00:00:00 +0000

The employer-sponsored insurance system was designed for a workforce that is disappearing. The preceding seven articles have documented the specific ways it is disappearing (FWD.01), the structural differences among the three coverage models competing to replace it (FWD.02), the actuarial and operational barriers to serving the fastest-growing employer segment (FWD.03), the coverage gap for the fastest-growing worker population (FWD.04), the strategic choices facing the operators best positioned to respond (FWD.05), the technology architecture that a purpose-built system would require (FWD.06), and the AI capabilities that are deployable now versus later (FWD.07). This article does not restate those arguments. It integrates them into a single question: who builds the benefits infrastructure the emerging workforce needs, and under what conditions?

Executive Summary: Synthesis: Who Builds the Benefits Infrastructure for the Future of Work?

Sun, 01 Mar 2026 00:00:00 +0000

FWD.08 — The Changing Market
#

The gap this series has documented is specific enough to state in one paragraph. A benefits infrastructure that serves workers whose employment relationships do not conform to the single-employer, full-time, plan-year model that existing products assume does not adequately exist. This includes 4.9 million employer firms with fewer than 10 employees representing 78.5 percent of all employer firms and growing faster than any other segment. It includes 120,000 fractional leaders who doubled in two years, earning $120,000 to $360,000 from multiple clients and buying individual market coverage at full price because no group product is designed for them. It includes the 55 to 64 cohort forming businesses at 0.38 percent of the adult population monthly, with a decade until Medicare and no coverage product suited to their situation. The gap persists not because nobody has noticed but because closing it requires simultaneous investment in product design, technology infrastructure, and regulatory navigation. The actors with domain knowledge lack capital. The actors with capital lack domain knowledge. The actors with technology lack both domain depth and carrier relationships.

Forward Looking on Syam Adusumilli

The Employment Relationship Is Fracturing: What It Means for Employer-Sponsored Health Coverage

Executive Summary: The Employment Relationship Is Fracturing: What It Means for Employer-Sponsored Health Coverage

FWD.01 — The Changing Market #

ICHRA, ACA Markets, and Level Funded: Three Models in Search of a Strategy

Executive Summary: ICHRA, ACA Markets, and Level Funded: Three Models in Search of a Strategy

FWD.02 — The Changing Market #

The Micro-Employer Problem: Why 1 to 10 Lives Is the Hardest and Most Important Market in Small Group Benefits

Executive Summary: The Micro-Employer Problem: Why 1 to 10 Lives Is the Hardest and Most Important Market in Small Group Benefits

FWD.03 — The Changing Market #

The Fractional Worker Coverage Gap: A Market Nobody Has Solved

Executive Summary: The Fractional Worker Coverage Gap: A Market Nobody Has Solved

FWD.04 — The Changing Market #

Business Choices for TPAs at the Inflection Point

The Market You Are In Today #

Executive Summary: Business Choices for TPAs at the Inflection Point

FWD.05 — The Changing Market #

The AI-First TPA: What a Ground-Up Architecture Would Actually Look Like

Executive Summary: The AI-First TPA: What a Ground-Up Architecture Would Actually Look Like

FWD.06 — The Changing Market #

What AI Can Actually Do for TPA Operations Today

Executive Summary: What AI Can Actually Do for TPA Operations Today

FWD.07 — The Changing Market #

Synthesis: Who Builds the Benefits Infrastructure for the Future of Work?

Executive Summary: Synthesis: Who Builds the Benefits Infrastructure for the Future of Work?

FWD.08 — The Changing Market #

FWD.01 — The Changing Market
#

FWD.02 — The Changing Market
#

FWD.03 — The Changing Market
#

FWD.04 — The Changing Market
#

The Market You Are In Today
#

FWD.05 — The Changing Market
#

FWD.06 — The Changing Market
#

FWD.07 — The Changing Market
#

FWD.08 — The Changing Market
#