Virtual Care for Self-Funded Plans: Opportunities & Challenges

As healthcare costs continue to rise, self-funded employers are increasingly exploring virtual care to improve access, manage costs, and support employee health. Nearly one in four employers with 50 or more employees added telehealth options to their benefits in 2024.

While virtual care offers significant opportunities, it also poses challenges that require careful planning and management. Understanding the opportunities and risks is essential for employers looking to invest wisely and improve outcomes for their workforce.

What is Virtual Care?

Virtual care refers to healthcare delivered remotely via technology. This includes telehealth visits (video, phone, messaging), virtual primary and specialty care, remote patient monitoring, digital coaching, and other services. Some are integrated with traditional care, while others operate independently.

Self-funded employers, who bear the financial risk of healthcare claims, are particularly well-positioned to benefit from virtual care. By reducing avoidable costs and improving outcomes, they can directly influence both employee health and their bottom line.

Opportunities of Virtual Care

	Lower Costs for Routine Care Virtual care often reduces costs for minor illnesses, follow-ups, urgent care needs, and mental health check-ins. By shifting visits from more expensive in-person settings to virtual platforms, employers can manage costs more effectively.
	Improved Access and Convenience Virtual visits remove barriers like travel and scheduling conflicts, making care more convenient. Increasing access to care improves utilization of preventive care and adherence to care plans, leading to better health outcomes.
	Chronic Condition Management Remote monitoring and digital coaching can help employees manage ongoing conditions such as diabetes or hypertension. Frequent touchpoints can reduce costly complications and hospitalizations and improve overall health.
	Flexibility and Innovation Virtual-first plans, hybrid models, and digital health tools offer new ways to meet employee needs while controlling costs. Employers can design benefits that prioritize access, quality, and affordability.
	Value-Based Purchasing Paying for outcomes rather than volume encourages responsible use and aligns virtual care with broader quality goals. Employers can structure contracts that reward high-quality, coordinated care.
	Direct ROI for Self-Funded Employers Savings from fewer ER visits, hospitalizations, and redundant tests directly impact self-funded employers’ bottom lines. With thoughtful implementation, virtual care programs can deliver measurable cost reductions over time.

Challenges of Virtual Care

	Overuse and Unnecessary Visits Ease of access may lead to overutilization for minor issues or conditions better treated in person. Employers need utilization guardrails to prevent overuse. This can be done in the benefit plan design.
	Fragmented Care If virtual providers don’t coordinate with in-person care, duplication of tests, conflicting recommendations, and gaps in care can occur, undermining cost savings and outcomes.
	Regulatory and Legal Risks Telehealth regulations vary by state. Employers must ensure vendors comply with licensing, privacy laws (Health Insurance Portability and Accountability Act), and malpractice standards to avoid liability.
	Technology and Access Barrier Reliable internet, user-friendly platforms, and digital literacy are critical. Lack of access or security breaches can hinder utilization and trust.
	Upfront Costs and Delayed Savings Virtual care often requires initial investment in technology, integration, and engagement. Savings may not be immediate, requiring a long-term perspective.

Best Practices for Employers

	Set Clear Goals and Metrics Determine objectives like reducing ER visits, improving chronic disease management, and increasing the use of preventive care and track outcomes, utilization, and costs.
	Select Integrated Vendors to Blend Virtual and In-Person Care Choose providers that coordinate with in-person care, share records, meet quality standards, and comply with regulatory requirements. Hybrid models ensure employees receive appropriate care, with seamless escalation from virtual to in-person visits when needed. The Alliance integrates virtual care providers into our Smarter NetworksSM to expand access and give employers a broader range of high-value care options.
	Engage Employees Promote virtual care offerings actively and communicate with employees clearly and frequently to make sure employees know how to use these options. Awareness and education drive employee adoption and improve outcomes.
	Monitor and Iterate Track claims, utilization, and employee satisfaction. Adjust virtual care offerings based on data and employee feedback.
	Address Equity and Access Provide support for technology use, language needs, and internet access to avoid widening disparities.
	Ensure Compliance Confirm vendors meet licensing, privacy, and telehealth requirements to reduce legal and regulatory risk.

Emerging Trends

Virtual-First Plans:

Prioritize virtual care as the initial point of contact, can reduce overall spending significantly.

Expanded Specialty Services:

Virtual dermatology, musculoskeletal care, and lifestyle management offer value where remote care is effective.

Value-Based Virtual Care:

Employers are increasingly tying virtual care payments to outcomes, utilization, and satisfaction rather than volume alone.

Key Questions for Employers Regarding Virtual Care

• Which cost drivers can virtual care address in my employee population?
• How can claims data guide benefit plan design decisions?
• Are current virtual offerings sufficient, or are new vendors needed?
• How will employee awareness and engagement be ensured?
• How will virtual care integrate with existing in-person care?
• Are legal and privacy requirements met?
• How will success be measured, and over what time period?

The Future of Employee Health Benefits

Virtual health services are a powerful tool for self-funded employers, offering lower costs, improved access, and better chronic disease management. However, it comes with challenges, including potential overuse, fragmented care, and regulatory challenges.

The key to success is strategic design, strong vendor selection, robust employee engagement, and ongoing monitoring. When approached thoughtfully, virtual health services can enhance employee health and strengthen benefits strategy, making it a win-win for both employers and employees.

Contact The Alliance to schedule a free consultation and learn how we can help you design a benefit plan that incorporates virtual care effectively