A smarter way to fund your health benefits.
Healthcare costs continue to rise, but the tools employers use to manage them have changed very little. Vitality Funding Flex offers a different approach: contributions flex with verified health management, so employees can influence what they pay and employers can share the value created when risk and claims improve.
Healthcare costs keep rising. Traditional approaches move the cost around.
Employers have traditionally responded to rising costs through higher deductibles, higher employee contributions, plan design changes and narrower networks. These levers may shift cost, but they do not address its underlying drivers. At the same time, many actions that influence future risk, including prevention, medication adherence, physical activity and condition management, sit with employees, while employers continue to bear most of the cost.
Health cost per employee
Projected, per PwC / KFF / Mercer benchmarks — see sources below.
Medical cost trend
Expected in 2027.1
Modifiable
Of total healthcare spending attributable to modifiable lifestyle factors.2
Borne by the employer
Of cost sits with the employer.3
Sources: 1. PwC, Behind the Numbers 2027 (June 2026). 2. Lifestyle impact plus estimate of impact of medication adherence and disease management, NEHI Research Brief, 2009. 3. KFF Employer Health Benefits Survey (2025). Health cost per employee: 2020, KFF 2020 Employer Health Benefits Survey; 2025, Mercer 2025 National Survey of Employer-Sponsored Health Plans; 2031, derived by compounding current costs using projected medical and pharmacy cost trends at 9–12% inflation.
Traditional healthcare funding is disconnected from efforts to manage health.
When healthcare costs rise, the increase is typically spread across the workforce regardless of the effort an employee makes to manage their health. Employees who complete screenings, take medication as prescribed or actively manage a condition are often treated the same as those who do not. Employers and employees remain economically misaligned, and employees have little control over what they pay.
A better funding model must do two things at once.
01 – Measure verified health management in a credible way
Employers need a fair, explainable measure that recognizes meaningful actions across prevention, physical activity, screening, coaching and condition management, and connects those actions to risk over time.
Vitality Status provides that measurement
02 – Connect that measure to healthcare contributions
Once verified health management can be measured, employers can align contribution levels to it, giving employees a clearer connection between the actions they take and what they pay for coverage.
Vitality Funding Flex creates that connection
Vitality Status turns verified health actions into a credible measure of risk reduction.
Vitality Status translates verified actions into a clear progression from Bronze through Platinum. Points are designed to reflect the relative impact of those actions on risk, making Status more than a participation measure. The Validation Institute independently reviewed the relationship between Vitality Status and risk-adjusted claims and placed a $100,000 credibility guarantee behind its assessment.
Points are weighted by their impact on health and future cost, and accumulate into four tiers: Bronze, Silver, Gold and Platinum.
Risk-adjusted total claims by Vitality Status
Indexed to Bronze unengaged = 100. Lower is better.
Lower claims
Members with higher Vitality Status have 15% lower healthcare claims, even after adjusting for demographic and clinical differences.
The Validation Institute stands behind its assessment of this fact with a $100,000 credibility guarantee, alongside an independent ERISA guarantee of up to $1 million.
Vitality USA experience showing Vitality Status in the previous year against medical claims the following year. 93,000 members included in the analysis. Risk-adjusted for age, gender, client (as a proxy for product type), entity role and condition count to remove selection effects.
What changes when the whole system works together.
Health outcomes
- Healthier everyday behaviors
- Greater preventive-care completion
- Improved support for chronic conditions
- Better follow-through on recommended actions
Workforce outcomes
- Healthier, safer, more resilient employees
- Earlier identification of risks
- Stronger access to coaching and human support
- Improved employee experience
Benefits outcomes
- Better awareness and utilization of existing benefits
- Less fragmentation
- A clearer next step for employees
- A more coordinated vendor ecosystem
Business outcomes
- Reduced underlying health risk
- Measurable claims impact
- Greater confidence in wellbeing investment
- More sustainable benefit strategies
Align healthcare contributions with verified health management.
Vitality Funding Flex allows employee contributions to flex by Vitality Status. Instead of applying the same increase to everyone, employers can create a contribution structure that recognizes verified efforts to manage health.
Employees gain something they can understand and influence. Employers gain a more accountable affordability strategy. The employer sets the contribution differential and plan design; Vitality provides the validated measurement it runs on.
Beyond health management efforts: the impact of Status-linked incentives on engagement
Clients with contributions aligned to Vitality Status have almost four times more highly engaged members than clients without. Moving from an average premium reduction with low alignment to a large premium reduction with high alignment increases the share of members reaching Gold or Platinum by up to 19%.
What it can look like for an employee.
Before Vitality Funding Flex, employees pay the same average contribution regardless of their efforts to manage their health. In the illustration below, contributions change by Vitality Status. The difference between Bronze and Platinum is $2,250 per year, creating a simple employee proposition: actively manage your health, build your Status and reduce what you pay for coverage.
A $2,250 annual contribution opportunity. In this worked example, an employee moving from Bronze to Platinum reduces their annual contribution from $5,700 to $3,450. The illustration is not a standard design; the employer determines the contribution levels and Status differentials.
| Status | Relative claims | Employee annual contribution |
|---|---|---|
| Bronze | 106% | $5,700 |
| Silver | 100% | $4,800 |
| Gold | 95% | $4,170 |
| Platinum | 90% | $3,450 |
Illustrative example only. Based on an average single contribution of $10,000 with a 20% employee share and a family contribution of $30,000 with a 30% employee share, at a 60/40 single-to-family mix. Matches insights from the Mercer 2025 National Survey of Employer-Sponsored Health Plans.
The employer is protected across engagement scenarios.
The economics work through two levers. When more employees engage, claims savings become the primary source of value. When engagement is more moderate, value comes from a combination of claims savings and contribution alignment. If behavior change is limited, the contribution structure provides economic protection. In the modeled design, the employer reaches approximately $400,000 in bottom-line savings per 1,000 employees across all three scenarios, after platform and reward costs.
Employer savings per 1,000 employees across behavior change scenarios
Illustrative example only, based on the same design shown above. Employer savings per 1,000 employees. Claims savings calculated as (employer + employee contributions) × 85% claims ratio × 4%. Contribution shift calculated per Vitality guidelines as structured in this case study.
A three-year ROI guarantee puts Vitality’s fees behind the outcome.
For qualifying employers, Vitality guarantees positive cumulative net savings over three years. If the employer does not achieve that result, Vitality refunds 50% of eligible administration fees. The guarantee aligns our success with the employer’s success and adds financial accountability beyond the modeled illustration.
Of admin fees at risk
Vitality underwrites positive cumulative net savings over the first three years. If those savings aren’t achieved, we refund 50% of eligible admin fees.
Our commitment
- Positive cumulative net savings over three years
- 50% of eligible admin fees at risk
- Refund of eligible fees if savings are not achieved
What we need from you
- 2,000+ covered employees
- The recommended Vitality Funding Flex design
- Foundational rewards funding
- Annual claims data sharing
Claims analysis provided at no cost
To activate the guarantee, Vitality will provide a claims analysis at no cost to verify the ROI impact. That analysis will cover the year before implementation, and the three years of program operation.
A more accountable way to manage healthcare affordability.
Vitality Funding Flex connects three things that traditional funding keeps separate: the health actions employees take, the contribution they pay and the financial outcome the employer needs. Vitality Status provides the validated measurement, the contribution design shares value with employees, and the ROI guarantee creates accountability for results.
Your Vitality team can model Vitality Funding Flex against your current plans and contribution strategy.
