The Ultimate Guide to Saving on Group Health Benefits for Mid-Market Companies

Why Group Health Costs Are Squeezing the Mid-Market

For mid-sized employers, offering health insurance is no longer a simple checkbox on an HR to-do list. It’s a high-stakes balancing act between rising premiums, evolving compliance requirements, and the need to attract and retain employees in a competitive labor market.

You’re not alone. Mid-market companies face unique pressures: you’re too large for small group plans, but not big enough to command enterprise-level pricing. You carry the weight of compliance without the luxury of redundant staff. That’s where strategic benefits planning becomes essential.

What Defines a Mid-Market Company?

The term “mid-market” (or “middle market”) generally refers to companies that fall between small businesses and large enterprises in terms of revenue and workforce size. While definitions vary slightly depending on the source, most agree that mid-market businesses generate annual revenues between $10 million and $1 billion and typically employ 100 to 2,000 people.

Unlike startups or small businesses, mid-market firms often have multi-location operations, large hourly or shift-based workforces, and more complex compliance responsibilities—particularly when it comes to group health benefits and ACA regulations.

Common Industries in the Mid-Market

While mid-sized companies span all sectors, several industries tend to dominate the mid-market category, including:

Construction and Contracting
Manufacturing and Distribution
Hospitality and Food Service
Retail Chains and Franchises
Healthcare Services
Logistics, Warehousing, and Transportation
Professional Services and Staffing Agencies

These sectors often rely on non-traditional workforces—hourly, seasonal, part-time, or high-turnover roles—which creates unique challenges when designing affordable, compliant, and usable health benefits.

How Does a Mid-Market Company Compare to a Qualified ALE?

Under the Affordable Care Act (ACA), a Qualified Applicable Large Employer (ALE) is any employer that has 50 or more full-time or full-time-equivalent employees on average in the prior calendar year. ALEs are required to:

Offer Minimum Essential Coverage (MEC) to at least 95% of full-time employees
Offer plans that meet Minimum Value and Affordability standards—or face Penalty B
File annual ACA reporting (1094-C/1095-C forms) with the IRS

While “mid-market” is a business size designation and “Qualified ALE” is a regulatory designation, many mid-market companies are also ALEs. However, not all ALEs are mid-market—some may be smaller businesses with large seasonal spikes in workforce, while others may be part of ownership structures that trigger ALE status through control group aggregation.

Key Distinction:

Mid-Market is typically based on revenue and total employee headcount, spanning industries and organizational models.
Qualified ALE is strictly defined by ACA regulations based on employee hours worked, regardless of revenue or structure.

In practice, most mid-market employers are Qualified ALEs—which means they face complex decisions when it comes to selecting compliant, affordable group health benefits. That’s where SBMA delivers value: helping mid-market ALEs meet regulatory obligations, control costs, and improve employee satisfaction through streamlined benefits administration.

Proven Strategies to Lower Health Benefits Costs

1. Use Tiered Plan Designs That Align with ACA Requirements

Mid-sized employers can struggle to meet budgetary requirements while still providing enticing benefits. You’re large enough to fall under the Affordable Care Act (ACA) employer mandate, but not large enough to absorb rising premiums without consequences. Too many companies still default to a single, high-cost plan for all employees unaware that there are alternatives available..

Smart mid-market employers are shifting to customizable,tiered plan designs. This structure allows you to meet ACA compliance thresholds while offering meaningful, usable benefits to your workforce—without overspending. A well-structured tiered approach generally includes three components:

Minimum Essential Coverage (MEC)

MEC plans fulfill the ACA’s “offer” requirement under Penalty A, which applies to employers with 50 or more full-time equivalent employees. To avoid this penalty—over $2,000 per full-time employee per year—you must offer Minimum Essential Coverage to at least 95% of full-time staff. MEC plans are highly affordable for employers and cover only preventive and wellness services as defined by the ACA. While MEC doesn’t provide comprehensive care, it satisfies the legal requirement to offer coverage and acts as the foundation of your benefits strategy.

Limited Medical Plans

For employees who want more than just preventive care—but may not be able to afford or utilize full major medical coverage—Limited Medical Plans offer a practical middle ground. These plans provide set dollar amounts for everyday services like doctor visits, labs, imaging, urgent care, and prescriptions. They’re an ideal fit for hourly, part-time, and variable-hour workers, providing access to basic healthcare while keeping premiums low for both the employer and the employee.

Because these plans are voluntary and not designed to meet Minimum Value standards, they are best paired with a base MEC plan to ensure compliance while increasing value.

Minimum Value Plans (MVP)

To protect against ACA Penalty B, which applies when the offered coverage is not affordable or doesn’t meet Minimum Value, employers should consider offering a Minimum Value Plan (MVP) as one of the higher tiers. These plans cover at least 60% of expected healthcare costs and include hospital and emergency services, making them compliant under ACA affordability rules when structured correctly.

An MVP can be offered as a buy-up option for employees who want more robust coverage, while still allowing the employer to maintain ACA compliance and control costs by offering MEC and limited medical plans to the broader workforce.

How Customizing Health Benefits in a Tiered Structure Works

Tiered structure provides strategic flexibility. It ensures compliance with both Penalty A and B requirements under the ACA, while empowering employees to choose the level of coverage that best fits their needs and budgets. For employers, it translates into significant cost savings, reduced legal exposure, and higher employee satisfaction.

SBMA specializes in designing and administering tiered benefits strategies for mid-market companies, with fast implementation timelines and full support through every step of the process. Our plans are ACA-tested, enrollment-ready, and fully supported through our streamlined digital systems and HealthWallet app.

2. Offer Voluntary Worksite and Ancillary Benefits

When it comes to employee benefits, value perception matters. Employees want choices—and employers need cost control. That’s where voluntary worksite and ancillary benefits come in.

These benefits allow employees to enhance their coverage through payroll deductions, giving them access to additional protection without increasing the employer’s premium liability. For employers, it’s a way to boost retention and satisfaction while keeping fixed costs low.

SBMA seamlessly integrates these benefits into your onboarding, enrollment, and digital benefits administration system, eliminating administrative burden and simplifying employee access.

Common Voluntary and Worksite Benefits Include:

Dental Insurance
Covers preventive cleanings, exams, X-rays, and treatments like fillings and crowns. A highly requested benefit that supports both health and wellness.
Vision Insurance
Includes eye exams, glasses, contacts, and in some plans, corrective surgery discounts. Helps reduce out-of-pocket expenses for common vision care needs.
Life Insurance
Provides financial protection to an employee’s family in the event of their death. Typically offered as basic term life, with options to add supplemental coverage.
Accident Insurance
Pays out lump sums or reimbursements for injuries due to accidents—on or off the job. Especially valuable for workers in physically demanding or high-risk roles.
Critical Illness Insurance
Offers lump-sum payments for serious diagnoses such as cancer, heart attack, or stroke. Helps employees offset medical costs and lost income during recovery.

Each of these plans is employee-paid, so they don’t affect the employer’s contribution strategy—but they add meaningful choice and security for your team. Whether your workforce is part-time, seasonal, or full-time, these benefits allow you to offer more without spending more.

3. Choose Level-Funded Plans When Appropriate

If your employee population is relatively healthy and stable, level-funded plans may offer a significant cost advantage. These plans combine the predictability of fully insured premiums with the transparency and potential savings of self-funding.

4. Simplify Benefits Access with the SBMA HealthWallet App

Confusion leads to low utilization—which means you’re paying for benefits employees don’t understand or use. Every SBMA enrollee receives access to HealthWallet, a mobile app that puts all plan information, digital ID cards, and support tools in one place. It’s simple, fast, and built for today’s workforce.

5. Prioritize Preventive and Telemedicine Access

Encouraging preventive care is one of the most cost-effective strategies for long-term savings. With SBMA plans, employees have no-cost access to preventive services and 24/7 telemedicine options—reducing expensive urgent care visits and improving overall plan performance.

Understanding ACA Compliance: The Cost of Getting It Wrong

Noncompliance is expensive. The ACA imposes two major penalties for employers with 50+ full-time equivalents:

Penalty A: Failing to offer Minimum Essential Coverage to 95% of full-time employees
Penalty B: Offering coverage that is either unaffordable or doesn’t meet Minimum Value standards

SBMA plans are engineered to meet ACA requirements—helping you avoid these penalties while still managing cost.

Why the Right Benefits Administrator Matters

Your health plan is only as strong as the team managing it. At SBMA, we provide the Gold Standard of Benefits Administration for mid-market employers. That means:

Lightning-Fast Enrollment Turnaround: Most clients are live in days, not weeks.
Integrated Support and Tech: One partner. One platform. One point of contact.
HealthWallet Mobile App: Every employee has on-demand access to their benefits.
End-to-End Plan Administration: From onboarding to offboarding, ID cards to claims—SBMA handles it all.

We don’t just provide benefits. We provide clarity, control, and confidence.

What to Look for in a Group Health Partner

When evaluating your options, look for a partner that can offer:

ACA-compliant plan design and documentation
Multiple plan tiers to support cost control
Integrated voluntary benefits administration
Mobile-first member support (like SBMA’s HealthWallet)
Speed and accuracy in enrollment and eligibility processing

SBMA is built for the needs of growing employers. We support companies across industries with diverse workforces, nontraditional employment models, and variable-hour schedules. Whether you operate regionally or nationally, we scale with you.

Ready to Reclaim Control of Your Group Health Budget?

Don’t accept inflated premiums or one-size-fits-all coverage. Reach out for plan pricing and options built to fit your business and your workforce.

Contact SBMA today to start building a benefits package that works, for you and your employees.