Inflation, hospital spikes and rising pharmaceutical prices are rapidly eroding human capital budgets. For CFOs who are already under pressure to cut costs, healthcare benefits present both challenges and opportunities.
In fact, 54% of CFOs surveyed by Chief Executive Group and Roundstone Insurance for the 2025 Health Plan Preparation Survey were top priority this year, with nearly half of that (48%), with health costs at the top of that list. Over 80% agreed that rising healthcare costs are undermining organizational revenue.
Is there a practical and strategic framework to help CFOs regain financial management and provide benefits plans that truly support workers' health and outcomes? Here are some development tips and recommendations.
The current situation will go back
The full insurance plan, despite its familiarity, has limited visibility into double-digit premiums and cost. Almost 40% of CFOs explain the challenge of balancing the balance between rising costs and employee expectations as a continuous battle. In a fully insured environment, almost half of all CFOs report facing serious or growing tensions.
recommendation: Start by measuring the return on investment (ROI) for your current plan. We assess metrics such as premium versus coverage (used at 72% of CFOs), total employer costs (78%), and especially per employee per year (Pepy). This is a key number that tracks 68% of CFOs, even if 55% are new to domestic benchmarks.
Accepting your own funds through prisoners
Group captive self-funding introduces CFOs into innovative models that replace unpredictability with transparency and pooled risk protection. Of the companies that already use prisoners of war, 5% report serious issues that balance the quality of profits with the quality of their products.
recommendation: Assess whether your company (realistically 25-1,000 employees) can move to a prisoner of war structure. CFO using CaptiVEs are much more likely to track costs per employee and actively collect employee feedback.
Harness risk pooling and stop loss to protect returns
Prisoners reduce volatility through pooled risk sharing and stop loss insurance. While 73% of traditional self-financed plan CFOs worry about cost spikes, only 18% of prisoners express healthcare as their biggest concern. The prisoners also provide direct revenues of unused premium funds, increasing financial efficiency.
Recommendations: Choose prisoner partners with a strong track record of cost management, low collateral requirements and transparent reporting. Captive CFOs are familiar with planning data and report more confidence in future forecasts.
Proactively plan flexible budgeting models
A self-funded model allows for flexible budgeting. This is already done by 80% of CFOs assessing the value of their health plans each year.
recommendation: Use fundraising approaches such as “Funding Max” and “Expected Cost Planning” to maintain predictability. Keep your spare buffers, keep your funds individually in escrow, and build your budget based on data, especially from previous billing and pharmacy spending.
Building a team focused on value creation, not just planning maintenance
The right vendor makes the difference. Many CFOs question whether current brokers are doing enough to reduce costs. Your benefits advisor should drive plan optimization throughout the year. Third-party administrators and PBMs should provide real-time billing data and pass-through RX savings. This is important when drug inflation was appointed as the main driver of costs with multiple CFOs in 2025.
recommendation: Surround yourself with partners who prioritize fiduciary duties, transparency and flexibility. Ensure alignment between vendor compensation and savings targets.
Use claim data as a strategic compass
The CFO says detailed data on health use and claims is most useful in assessing the value of the plan. Access to this data is important to identify avoidable middle tier billing costs. This is more frequent than catastrophic events and finds outrunning drug spending.
recommendation: Secure at least one year's worth of billing data. Next, we assess the diagnostic categories, provider type, and trends related to pharmacy use. Early victory for targets, including layered formulas, narrow pharmacy networks, and chronic condition programs.
Remove any barriers to change
Almost 38% of CFOs cite implementation complexity as a major barrier to change in benefits strategies. Another 37% say budget constraints are getting in the way.
Recommendations: Find a partner that offers a first year savings guarantee or financial risk sharing. Emphasise the potential of ROI to the CEO or board of directors. Especially when 40% of CFOs report that they apply direct pressure from leadership to reduce healthcare costs.
Measure what's important to track true financial performance
Traditional metrics such as increased annual updates only show part of the story. Savvy CFOs, especially those who use prisoners, will track more strategic KPIs. Peppy, employee satisfaction and efficiency of use all create a more complete picture.
Recommendations: Rely on brokers and vendors to protect your KPI dashboards, including finance, utilization and centimetrics. They are monitored quarterly and benchmarked against national and industry norms.
Reconstructs benefits as investments with tangible returns
With 99% of CFOs acknowledging that it's their responsibility to manage healthcare spending, it's clear that this is not just an HR issue, but a financial prioritization. Captives of war money is not strategic and transformative, as they continue to consume a large portion of their human capital budgets due to inflation and rising healthcare costs. When properly configured, these models reduce costs, protect against volatility, and empower CFOs with data for better decisions.
Even amidst the economic uncertainty, opportunities for control, predictability and long-term savings have never been greater.
Next Steps for CFOs
- Benchmark current plan performance and clarify the Peppies.
- We investigate the feasibility of group prisoners and models' potential returns.
- Coordinate financial and HR leaders around shared cost and value goals.
- Select a partner that offers implementation support and a first year warranty.
- Quarterly financial reviews will make healthcare KPIs a permanent agenda item.
In 2025, cost reductions are essential, but maximizing returns is the real goal. A smarter healthcare strategy allows you to do both.
See Roundstone's A CFO guide to managing escalating healthcare costs.
