Why Employers Struggle to Manage the Cost of Their Employee Health Benefits—and What Might Help

A Policy Brief on Cost Control in Self-Insured Employer Health Plans

Christine Buttorff, Petra W. Rasmussen, Mallika Bhandarkar, Mekdes Shiferaw, Erin Lindsey Duffy

ResearchPublished Aug 24, 2026

Most U.S. employees with employer health coverage are in self-insured plans, where employers bear the financial risk of health care costs. Interviews with employers, third-party administrators, and market insiders identify five reinforcing barriers to cost control and review potential solutions, including improved contracting terms, stronger federal transparency rules, clearer fiduciary roles, and opt-out models, such as direct contracting.

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Buttorff, Christine, Petra W. Rasmussen, Mallika Bhandarkar, Mekdes Shiferaw, and Erin Lindsey Duffy, Why Employers Struggle to Manage the Cost of Their Employee Health Benefits—and What Might Help: A Policy Brief on Cost Control in Self-Insured Employer Health Plans. Santa Monica, CA: RAND Corporation, 2026. https://www.rand.org/pubs/research_reports/RRA5144-1.html.
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This work was funded by the National Institute for Health Care Reform and conducted in the Financing and Organization Program of RAND Health.

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