Health coverage redefined through innovative self-funded solutions

By Ben Callaghan

Consultants and health plan startups are redefining health coverage by creating innovative self-funded solutions that tackle rising costs and gaps in traditional plans. These new models combine specialized solutions and tailored offerings to serve overlooked segments, such as gig and part-time workers, associations and businesses looking for new ways to address rising costs.

Because these solutions are less traditional than a large carrier plan, they require a greater level of education and seamless access to an array of unbundled solutions or service providers that make up the total benefit.

Unlike a set-it-and-forget-it health plan, these solutions may require more from members — navigating new tools, understanding unique coverage options and making smarter health care decisions. Artificial intelligence is proving to be a game changer for new plan designs by providing the automated guidance needed to enable members to use their benefits effectively.

By acting as the glue that connects plans, providers and members, a centralized health platform enabled by AI helps to deliver cohesive, scalable programs that reduce costs, improve outcomes and meet members where they are.

Nontraditional solutions require new technology

These ambitious builders are creating benefit packages designed to tackle rising costs and needs of employer groups, especially those who employ members of underserved populations. and are enhanced with cost-containment solutions, telehealth and transparency tools.

In many cases, these benefits can become very rich and much more affordable, but what happens when you take 12 different organizations that each provide a specific benefit and then ask members to navigate that landscape? You have a mess on your hands.

A digital platform delivering a configurable, consumer-grade benefit experience is no longer optional — it’s essential. Technology becomes the glue holding these programs together, not just simplifying integration but enabling growth and scalability for truly innovative solutions. While many claim to have solved "point-solution fatigue" with catch-all apps, the real value lies in platforms designed to unify and integrate these solutions into a cohesive system that works.

Driving behavior shifts with AI

Technology alone isn’t enough. The success of nontraditional benefits depends heavily on a behavior shift among members. These plans require members to actively engage, make informed decisions, and understand how to navigate options that are anything but typical. Generative AI offers an ability to “do the work for them” — helping members self-serve in the moment.

What makes AI so effective is its human-like interface, which turns complex navigation into a simple conversation. It provides real-time personalized support, answering questions about benefits, solutions and policies in plain language. It simplifies processes for both administrators and members, helping members access the care they need without frustration.

Ask an AI assistant about coverage, costs or finding providers, and you should receive immediate, accurate responses. This capability not only reduces reliance on call centers but builds a habit of engagement, empowering members to explore and use their benefits confidently.

A lasting health care trend

Although generative AI offers immediate value for alternative health plans, its impact reaches beyond these groups. It’s also driving traditional employers to explore self-insurance and alternative models. Data shows 65% of covered workers in the U.S. are now in self-insured plans — a number that continues to grow. Meanwhile, 36% of large employers are already using alternative medical plans, proving that these models are gaining traction across the market.

Fully insured plans dominated because they simplified administration, but advancements in AI-powered platforms are changing the game. These technologies alleviate the complexity of unbundled solutions, unlocking scalability, engagement and cost savings.