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How Kwik Trip Reduced Healthcare Costs While Improving Employee Health

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As healthcare costs continue to rise, employers are searching for sustainable strategies to improve affordability without compromising quality. Kwik Trip, Inc., a family-owned convenience store company based in La Crosse, Wisconsin, offers a compelling example of how a self-funded health plan, paired with innovative benefit design and strategic partnerships, can transform both cost and care outcomes.

Kwik Trip received a Healthcare Transformation Award at The Alliance’s 2026 Spring Symposium for their dedication to improving health benefits for their employees.

Founded in 1965, Kwik Trip employs more than 38,000 people across nearly 900 stores throughout the Midwest. With a workforce of this size, healthcare is one of the company’s largest expenses and is projected to reach $200 million annually. Rather than accepting rising costs as inevitable, Kwik Trip has taken a proactive, data-driven approach to their health benefits.

Bryan Trainor
Bryan Trainor, Senior Manager of Talent Wellbeing & Compensation, Kwik Trip

 

Commitment to Employee Health and Shared Savings

Kwik Trip’s healthcare strategy begins with a clear philosophy: investing in employees drives better outcomes for both people and the business. The company reinvests 40% of its gross profit into employees through a profit-sharing program, reinforcing a culture where financial and health outcomes are aligned.

By helping employees make smarter healthcare decisions and reducing unnecessary spending, Kwik Trip creates a system where both the organization and its workforce benefit. Lower healthcare costs translate into stronger financial performance, which in turn supports employee compensation and long-term sustainability.

Why Self-Funding Matters

A key component of Kwik Trip’s success is its self-funded health plan model. Unlike fully insured plans, self-funding gives employers direct visibility into healthcare spending and utilization patterns. This transparency allows organizations to:

For Kwik Trip, self-funding has enabled a more strategic and responsive approach to healthcare.

The Smart Healthcare Consumer Plan: A Tiered Benefit Design

At the center of Kwik Trip’s strategy is its Smart Healthcare Consumer Plan by TIC, a three-tiered benefit design that guides employees toward cost-effective care.

Tier 1: Preferred-Value Providers

Through its partnership with The Alliance, Kwik Trip offers employees access to Preferred-Value Providers with $0 out-of-pocket costs and no deductible. This tier removes financial barriers and makes high-value care the easiest and most affordable choice.

Tier 2: Moderate Cost-Sharing

Employees using Tier 2 providers pay a copay but no deductible, encouraging thoughtful decision-making while maintaining affordability.

Tier 3: Full Cost Responsibility

Employees pay 100% of costs until their deductible is met when using providers in this tier. This creates a strong incentive to choose higher-value options.

Measurable Results: Lower Costs, Better Outcomes

Kwik Trip’s benefit design is not just innovative; it delivers measurable results.

In 2025, the Smart Healthcare Consumer Plan achieved an average per-member-per-month (PMPM) cost of $303.41, compared to $957.11 under a traditional copay plan.

This dramatic reduction highlights the impact of aligning incentives, simplifying choices, and steering employees toward high-value healthcare.

The company plans to expand this model across Wisconsin, further scaling its impact.

Strategic Cost Containment Initiatives

Kwik Trip complements its benefit design with targeted programs that address key cost drivers across medical and pharmacy spend.

Pharmacy Strategy Transformation

In 2024, Kwik Trip changed its pharmacy benefit manager (PBM), resulting in over $1 million in savings. By partnering with a more transparent and collaborative PBM, the company improved cost control and pricing visibility.

Looking ahead, Kwik Trip plans to open an on-site pharmacy in La Crosse, WI in 2026. This investment will allow the company to purchase medications at lower costs and improve access for employees.

On-Site Clinics and Direct Access to Care

Kwik Trip operates three on-site clinics, providing convenient, high-quality care directly to employees. These clinics reduce barriers to primary care, improve early intervention, and help manage chronic conditions more effectively.

RightSite of Care Program

Kwik Trip’s RightSite program helps employees choose the most appropriate setting for care, recognizing that services delivered in clinics are often far less expensive than those in urgent care or emergency rooms. By steering employees away from unnecessary ER and urgent care visits, the program generated $1.7 million in savings in 2024.

Care Navigation and Incentives

Through care navigation, employees receive guidance on where to go for high-value care. Through care navigation, employees receive guidance on where to go for high-value care. This effort generated more than $450,000 in savings, supported by cash incentives for choosing Preferred-Value Providers.

Chronic Condition Management

Like many large employers, Kwik Trip faces significant costs related to chronic conditions. In 2024, the top five conditions among employees were:

Rather than treating these as fixed costs, Kwik Trip implemented targeted interventions to reduce prevalence and improve outcomes.

By 2025, the company successfully reduced the incidence of four of these five conditions below benchmark levels:

Diabetes Management Program

Kwik Trip’s diabetes management program delivered particularly strong results, achieving a 48% savings rate for engaged participants compared to those not enrolled. This underscores the value of proactive, condition-specific interventions.

Investing in Whole-Person Health: My Wellbeing Journey

Beyond cost containment, Kwik Trip prioritizes employee well-being through its My Wellbeing Journey program. This comprehensive initiative includes:

This holistic approach supports not only physical health, but also employee engagement, retention, and productivity. In a competitive labor market, these benefits help differentiate Kwik Trip as an employer of choice.

The Role of Strategic Partnerships

Kwik Trip’s long-standing partnership with The Alliance has been instrumental in its success. As an employer-member for more than 20 years, Kwik Trip actively participates in benefit design, governance, and healthcare reform initiatives.

With approximately 11,000 employees and 18,000 covered lives in its health plan, the company leverages The Alliance’s network strategies to:

As the largest member of The Alliance, Kwik Trip plays a leadership role in shaping network strategies that benefit not only its own workforce, but also other employer-members across Wisconsin, Minnesota, Iowa, and Illinois.

Educating Employees to Drive Better Decisions

A critical component of Kwik Trip’s strategy is employee education. Benefit design alone is not enough; employees must understand how to navigate the healthcare system to receive cost-effective care.

Kwik Trip focuses on:

By consistently educating employees about high-value care options and making them easy to identify and access, the company empowers employees to become smarter healthcare consumers.

Key Takeaways for Employers

Kwik Trip’s approach offers several lessons for organizations looking to reduce healthcare costs and improve outcomes:

Align Incentives with Value

Design benefits that make high-value, cost-effective care the most attractive option.

Use Data to Drive Strategy

Leverage claims data to identify cost drivers and implement targeted interventions.

Invest in Primary and Preventive Care

On-site clinics, care navigation, and chronic condition management programs can significantly reduce long-term costs. Kwik Trip achieved a 48% savings rate for participants in their diabetes management program.

Build Strong Partnerships

Collaborate with organizations like The Alliance to access high-value provider networks and shared expertise.

Engage Employees

Education, communication, and incentives are essential to influencing healthcare behavior.

Reduce Healthcare Costs

By self-funding and designing an effective benefit plan, and using incentives to encourage the use of high-value healthcare options, Kwik Trip saved:

A Model for Sustainable Healthcare Transformation

Kwik Trip’s healthcare strategy demonstrates that meaningful change is possible when employers take an active role in managing healthcare. By combining self-funding, innovative benefit design, strategic partnerships, and employee engagement, the company has achieved what many organizations strive for: lower costs and better outcomes.

As healthcare continues to evolve, Kwik Trip’s model provides a roadmap for employers seeking to take control of their healthcare spend while supporting the health and well-being of their workforce.