The shape of claims data at most 21-to-100 FTE employers looks roughly the same year after year. A small portion of the workforce drives most of the spend. The published ratio is usually around 5 percent of employees accounting for 50 percent of claims, sometimes higher in particularly concentrated populations. The exact split varies. The pattern does not.
Understanding the shape changes what an employer can actually do about renewal increases. Most renewal strategy treats the workforce as undifferentiated. The math says it should not.
Where the concentration comes from
The 5 percent is not random. It is structural, and the structure is medical.
Chronic conditions account for the bulk of healthcare spend across the U.S. system. Diabetes, hypertension, heart disease, COPD, chronic kidney disease, and behavioral health conditions are the categories that drive the back end of the claims curve. An employee managing diabetes generates predictable annual claims for medications, lab work, and provider visits, and is at elevated risk for the kind of inpatient episode (cardiac event, kidney complication, neuropathy) that produces a five-figure claim or a six-figure claim depending on severity.
These conditions tend to cluster in specific employees rather than spreading evenly across the workforce. A 60-employee manufacturer with three diabetics, two employees with diagnosed heart conditions, and one employee with a serious behavioral health condition is operating with a 10 percent concentration that drives well over half of total claims, depending on the severity of each individual case.
The other 90 percent of the workforce is mostly producing routine claims at predictable rates. They are not the renewal problem.
Why this matters for renewal math
When a renewal comes back at 12 to 18 percent above the prior year, the underwriting math is not punishing the employer for the routine claims. The model is pricing the concentrated risk and the trend in that risk over time.
If an employer's claims data shows three employees driving $180,000 of the $300,000 in total claims, the underwriting model is asking two questions. Are those three employees getting more expensive year over year, and is the next year likely to add a fourth or fifth concentrated case from the population at risk.
The answer to both questions is usually yes. Untreated or undertreated chronic conditions get more expensive over time, and the population at risk in any given workforce typically grows year over year as employees age in place.
This is why the renewal increase is not really about last year's claims. It is about the underwriter's projection of next year's concentration.
What the routine wellness portal does not do
The wellness portal most employers run does not address the concentration. The portal is structured around the broad workforce. It rewards step counts, screenings, and healthy behaviors. The 5 percent driving the spend is rarely the population most engaged with the portal, and the portal's interventions are not clinically connected to the conditions producing the cost.
A diabetic employee who walks 8,000 steps a day and completes the annual biometric screening still has diabetes. The screening confirms what is already known. The steps are good for the employee and largely irrelevant to the claims trajectory. The portal generates a participation metric that satisfies the wellness vendor's reporting requirement. It does not change the underlying risk concentration.
What changes the concentration is clinical access for the people who actually need it. Routine care coordination for chronic conditions. Earlier diagnosis for the conditions developing silently in the population at risk. Pharmacy support that keeps medications adherent. Telehealth that handles the routine visits without the friction that causes patients to skip them.
These interventions reduce the slope of the cost curve on the high-utilization employees, and they catch the next cases earlier, before those cases reach the same severity. Both effects compound over a 12-to-36 month window.
What this looks like in actual employer data
A working example from a mid-sized manufacturer, with details anonymized:
The employer ran an 80-employee plan. Annual claims totaled roughly $1.1 million. Of that, $640,000 was generated by 4 employees, all of whom had two or more chronic conditions actively being treated. The remaining $460,000 was generated by the other 76 employees, distributed across routine claims, occasional inpatient episodes, and dental and vision riders.
The 4 high-utilization employees were known to the HR team. They were not surprises. The plan was paying for their care because that is what the plan is for. The question was whether the trajectory on those 4 was being managed actively or just being absorbed.
After 18 months of a preventative healthcare layer that added care coordination, pharmacy support, and earlier diagnostic capacity, the high-utilization claims dropped to roughly $480,000. The total claims dropped to roughly $850,000. The renewal came back at 4 percent versus the 16 percent the prior year's trend would have produced.
The employer's annual savings on the renewal alone was roughly $90,000. The Section 125 payroll tax savings on the layer added another $58,000 across the participating employees. The vendor running the layer was paid through the structure, not by the employer. Net to the employer was around $148,000 in year one, with the trajectory expected to compound in year two as the layer's interventions kept catching earlier cases earlier.
This is one example, not a guarantee. The specifics depend on the actual workforce, the actual claims profile, and the specific plan structure. The shape of the savings is consistent across workforces that fit the profile.
Who this works for and who it does not
The math runs cleanly for employers with these attributes:
A workforce of roughly 20 to 100 full-time W2 employees.
Average wages below the Social Security wage base ($176,100 in 2026).
A stable enough workforce to sustain a 12-to-36 month intervention window.
Industries where chronic conditions are present in the typical workforce age and demographic: manufacturing, construction, healthcare, automotive, hospitality, home services, education, consulting.
A self-funded, level-funded, or fully-insured plan that the employer wants to keep in place.
The math does not run cleanly for workforces that are mostly 1099, mostly part-time, mostly under age 26 (low chronic condition baseline), or seeing turnover high enough that the intervention window cannot stabilize.
If a workforce does not fit the profile, the savings will not materialize at the published rates, and we will say so directly rather than push the conversation.
What employers can do tomorrow
The first step is not buying a program. The first step is looking at the claims data.
Most plans (especially self-funded and level-funded) make claims data available to the employer in aggregate form. Looking at the concentration ratio for the most recent 12 months tells the employer most of what it needs to know about whether the preventative layer's math will run.
If the data shows the typical pattern (5 to 10 percent of employees driving 40 to 60 percent of claims), the structure tends to work. If the data shows a much more even distribution, the savings will be lower per dollar of premium because the concentration the layer is designed to address is not really there.
The second step is a workforce profile review. Wage distribution, W2 versus 1099 mix, turnover rate, industry, and current plan structure determine whether the Section 125 mechanism applies and how much of the modeled savings the employer is positioned to capture.
The third step, if both signals are positive, is a vendor introduction and a census-level analysis.
The honest framing
Stone Path facilitates the introduction to the vendor running the preventative healthcare program. The employer pays Stone Path nothing. The vendor is paid through the structure itself, not by the employer. The claims reductions are real and documented in industry data, with the caveat that any individual employer's results depend on its actual workforce and plan.
The concentration is the thing that makes this work. If a workforce has it, the layer addresses it. If a workforce does not have it, the layer is not the right tool.
Walk through whether your workforce shows the concentration pattern and we will scope what a 12-to-36 month intervention would look like against your actual claims data.