A leading health insurance company engaged Stax to assess the opportunity for a new business within several target markets

The Situation
  • The client seeks national expansion, planning to launch a new business, offering self funded plans for small group employers within several target markets.

  • Stax assignment: Determine addressable market size and assess the competitive landscape within the target geographies.

The Assignment
  • We conducted a comprehensive assessment of the target markets, the landscape and channel dynamics, determining current and potential market opportunity.

The Benefits
  • Based on our assessment we were able to provide a market map of the commercial payer landscape in each target market, including: Size, Share and expected shifts in share.

  • Stax was able to provide a comparison and review of offerings and strategic focus among key competitors in the space for prioritization of most attractive markets for growth expansion.

The Finding
  • High Healthcare Costs is a Key Pain Point:

    -Driving down healthcare costs is a key concern for smaller employers as premiums and employer contributions continue to rise at 4%–5% annually over the last 5 years. Greater cost predictability and sustainable financial management are particularly critical for smaller employers in the current healthcare environment.

  • Growing Acceptance of Self-Funding:

    -There is growing awareness and interest in self-funding among smaller employers. More brokers are presenting self-funding as an option to smaller employers—sometimes to firms as small as 5–10 employees.

  • Broker’s Play a Large Role in Employer Benefits Decision-Making:

    -Benefits decision-makers in small-mid sized firms lack familiarity with both the extent and variety of available plan options as well as current regulations and their implications. Therefore, smaller employers tend to rely heavily on brokers to recommend the plans best-suited for them—entrusting them to understand their needs and shop for plans.