Cost containment is the set of tools employers use to slow benefit spend, including plan design, network steering, pharmacy management, wellness programs, and funding strategies such as level funding or self-funding. The aim is lower cost without gutting coverage.
A wellness program offers employees activities or incentives (screenings, coaching, fitness, tobacco cessation) to improve health and, ideally, reduce claims. Federal rules cap incentives and require reasonable alternatives, especially for health-based programs.
An LSA is an employer-funded account that reimburses employees for wellness and lifestyle expenses (gym memberships, fitness gear, certain wellbeing costs). Unlike an HSA or FSA, it is not tax-advantaged; reimbursements are generally taxable income.
Self-funded plans can use levers a fully insured plan can’t easily access: reference-based pricing, PBM carve-outs with transparent pharmacy contracts, narrow or high-performance networks, care navigation and advocacy, centers of excellence, and direct provider contracting.