Benefits advisor is adamant that without transparency and control, no one will be able to contain cost
Ben Bohonowicz has spent 16 years watching the group health insurance market shift. Today, as a Division Director at RCM&D in Baltimore, he believes the traditional broker model is approaching a reckoning and that self-funded health plans are the clearest path forward for the mid-market employers his team serves.
"The amount of double-digit increases that have come from the fully insured marketplace this year is the most I've ever seen in my career," Bohonowicz told Insurance Business Benefits US. "The starting point is around 12 to 15%, but we've gotten renewals that are 20, 30, 40, 50%."
Bohonowicz oversees a team of 60 benefits professionals spanning Philadelphia to Richmond, operating as the benefits arm of RCM&D, a firm with roots going back to 1885, predominantly in the property and casualty space. The division focuses heavily on the 50-to-1,000+ employee market, a segment where self-funded and level-funded arrangements are rapidly becoming the norm.
The self-funded shift is already here
The numbers back his view. Self-funded administrative services only (ASO) plans now account for 43.5% of total US health enrollment - the largest single coverage segment in the country.
And according to data from the Kaiser Family Foundation (KFF), nearly 27% of employers with 10 to 200 employees are now self-funded. "And if you bundle level-funded on top of that, it actually becomes the majority on a nationwide perspective," Bohonowicz said.
He frames the case for self-funding around three pillars for first-time employer conversations: transparency, control, and cost containment. In a fully insured arrangement, he says, employers have access to little or no claims data, no ability to shape the vendor stack, and no lever to pull when costs spike. "In the absence of [transparency and control], you will never contain cost. It will never happen. It's pure luck and hope if you end up having a good renewal from year to year."
Stop-loss contracts, he notes, have matured significantly, offering levers including no-new-laser with renewal rate caps, aggregate accommodation, advanced funding, and terminal liability option (TLO) off-ramps that allow employers to capture the upside of self-funding while protecting against runaway individual claimants and cash flow volatility.
Level-funded: a stepping stone with handcuffs
Bohonowicz is notably skeptical of level-funded plans as a genuine intermediate step, despite their rising popularity among small and mid-market carriers.
The core problem, he says, is structural as employers are choosing level-funded plans that haven’t fundamentally changed the underlying management of claims and misaligned incentives still persist. In addition, employers must remain with the carrier at renewal to receive their claims surplus; a condition that functionally mirrors the fully insured model they were trying to escape.
"It's a stepping stone that has some thorns tied to it," he said. "You've got to stay in order to get your surplus. Otherwise, you walk away from it completely. So at that point, it's no different than fully insured."
He is equally direct about what he sees as a failure of logic among competitors who move employers into captive arrangements without addressing underlying cost drivers. "Most of our competition is still trying to fix an insurance problem with insurance," he said, arguing that placing employers into captives while leaving the network rental and pharmacy benefit manager (PBM) relationships untouched does not change how medical and prescription costs are driven.
His preferred strategies - value-based primary care, quality provider navigation, direct contracting, centers of excellence, and carving out high-cost categories such as dialysis and specialty drugs - go further upstream.
A concierge pharmacy model targeting the 20%
Pharmacy costs sit at the center of Bohonowicz's cost containment strategy.
Industry averages place pharmacy spend at 25% to 30% of total plan cost but his team has worked with mid-market clients where pharmacy exceeds 50% of plan spend. The insight that drove RCM&D's approach, developed internally as early as 2017 and 2018, was that a PBM is not the most cost-effective way to purchase medications.
"When you use alternative sources for medications, your brand and specialty medications can be 60 to 80% less expensive than what you're able to get through the best negotiated PBM contract, even thinking about rebates," he said. The gap on generics is equally striking. "Most common generics like amlodipine or statins get negotiated down to like $15 to $20 per fill per month. We get that same exact medication for $0.20."
In response, the firm built a proprietary concierge pharmacy program that targets the 20% of plan members who drive 80% of pharmacy costs - those taking multiple maintenance medications, whether generic, brand, or specialty.
A dedicated pharmacy team coordinates procurement through the most cost-effective sourcing channel and delivers medications directly to members at no cost.
The employer pays wholesale acquisition cost rather than PBM-negotiated prices. The program is deployed even where a full PBM carve-out is not possible, running on top of an independent PBM arrangement where it consistently outperforms standard negotiated pricing, according to Bohonowicz.
For employers where pharmacy is driving outsized plan spend, he estimates that converting to self-funding, deploying the program, and fixing the PBM arrangement can reduce total plan costs by 20% to 30%.
The Department of Labor's ongoing push for pharmacy benefit transparency is providing regulatory tailwind for this kind of intervention and Bohonowicz believes more is coming from the enforcement side.
Broker compensation disclosures: the reckoning ahead
When asked to name the single biggest threat to the traditional broker model over the next two to five years, Bohonowicz did not hesitate.
"Broker compensation disclosures," he said. "When people start to see where the money is going and where the incentive lies, I think it will do the same exact thing that's happened in the 401(k) space."
Disclosure requirements that reshaped fee transparency in the retirement planning industry, drawing scrutiny to advisor compensation structures, are in his view poised to do the same in group health.
The Consolidated Appropriations Act of 2020 included broker compensation disclosure requirements for group health plans, and the Consolidated Appropriations Act of 2026 has extended and strengthened those provisions. But awareness among employers remains low.
"When we ask some of the prospects we work with, 'Have you seen your broker compensation disclosure?' - like, what are you talking about?" he said. "It's not being met the way it should be. There needs to be more teeth to this."
On the legislative outlook more broadly, Bohonowicz is measured.
He lived in Washington, D.C., for six years and worked with people on Capitol Hill and in agencies. His view: the foundational transparency architecture is largely in place.
"I would much rather see that more teeth come into the existing laws that are in place than new legislation get passed. I think the foundation for what we need of transparency and control is there, especially in the pharmacy space that's coming. We just need to see it in action."
For advisors who have built their model around carrier relationships and bundled product solutions, Bohonowicz's warning carries a specific weight: "As soon as people understand how they're being compensated, the reckoning will happen."
Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by finopulse.
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