Rising healthcare costs and outdated benefit models are forcing employers to choose between maintaining the status quo or adopting transparent, employee-first solutions.
Key Takeaways
- The supplemental benefits market has tripled from $4 billion to $12 billion, but delivery models haven’t evolved to serve employees better
- In some traditional plans, first-year commissions and expenses can consume more than half of every premium dollar (BeneRe analysis, 2025).
- Captive models align incentives by capping costs, sharing risk, and ensuring financial transparency.
- Over $35 million in dividends have been reinvested into employee wellness programs through transparent captive structures (per a 2025 BeneRe financial report)
In a recent episode of “Trending NOW” on Healthcare NOW Radio, BeneRe Founder and CEO Lamont Thurston joined host Shahid Shah to explore how group captive insurance models are reshaping the $12 billion supplemental health benefits industry. The conversation focused on tackling runaway commissions and returning unused premiums as ERISA plan assets to disrupt an industry built on inefficiencies. Listen to the Healthcare NOW podcast.
This discussion highlights a critical challenge facing employers today: rising healthcare costs and outdated benefit models are forcing them to choose between maintaining the status quo or adopting transparent, employee-first solutions.
While healthcare costs continue to rise, employees are carrying more of this unfortunate burden. In fact, deductibles have nearly tripled in the past two decades, leaving many households exposed despite having coverage. In addition, the supplemental benefits market has tripled from $4 billion to $12 billion, but delivery models haven’t evolved to serve employees better.
Employers now face a choice: continue with commission-heavy plans with poor reporting, or adopt a transparent model that prioritizes employees.
Where Traditional Benefits Fall Short
Supplemental benefits still operate on an outdated distribution model. Decades ago, these plans were sold in cafeterias by thousands of agents – and while enrollment has since gone digital, the commission structures built to support that model have largely remained. According to a 2025 BeneRe analysis report, first-year commissions in some plans can still reach as high as 70%. In other words, when employees pay a dollar in premium, much of it is absorbed before a single claim is ever paid. Employers serving as fiduciaries recognize that this model isn’t sustainable – or fair.
A Proven Model Applied in a New Way
Captive insurance has been around for decades, and it works. More than 8,000 captives worldwide manage about $50 billion in premiums for major organizations. BeneRe takes that same successful model and applies it to supplemental benefits. Here’s how it changes the game:
- Pre-negotiated carrier expenses and broker commissions are capped at responsible levels
- Risk is shared across millions of employees, eliminating conflicts of interest
- Full transparency shows where every premium dollar goes
The result: lower costs, better coverage, and a structure that safeguards employee dollars.
Dividends as Plan Assets
Following the payment of claims and expenses, any remaining premium is distributed back to the plan as a dividend. To date, over $35 million has been reinvested to strengthen employee benefit programs – funding wellness initiatives, assistance services, and decision-support tools that improve overall well-being.⁵ All dividends are treated as ERISA plan assets, protected, reportable, and managed with the same fiduciary discipline applied to retirement and medical funds.
Why it Matters
For households with $7,500 deductibles, supplemental benefits aren’t a luxury – they’re a financial safeguard. They act as a stop-loss for everyday families. A cancer diagnosis, for example, can lead to financial ruin, and nearly half of cancer cases are diagnosed before age 65. We provide life insurance for every employee, even though few ever use it. Shouldn’t we also protect them against the risks they’re far more likely to experience during their working years?
Looking Ahead
According to recent enrollment data, the BeneRe group captive now protects nearly two million employees across more than 180 large employers. Building on that success, BeneRe continues to explore ways to expand access, ensuring that future growth maintains the same transparency and fiduciary integrity that define the model today.
Conclusion
Supplemental benefits should not be overpriced, or stacked against employees. Through transparency, fiduciary stewardship, and reinvestment of dividends, employers can deliver meaningful protection while lowering costs.
As discussed in Lamont Thurston’s recent Healthcare NOW podcast interview, the future of voluntary benefits may depend on scalable, low-risk captive models that prioritize transparency and employee value. For HR leaders, CFOs, and benefits professionals navigating today’s high-deductible healthcare landscape, this approach represents a fundamental shift toward putting employees first.
Contact BeneRe today to learn how our award-recognized captive model can deliver better benefits with total transparency for your organization.