Not long ago, a plan member could walk into an in-network hospital, receive care from an out-of-network provider, and walk out with a five-figure bill. The plan paid some. The provider charged what they liked. The rest landed on the patient.
Those days are fading, but not because care has gotten simpler. It is because networks, once treated as a background detail in plan design, are becoming smarter, narrower, and more intentional. Insurers are rethinking how care is accessed, how providers are selected, and how costs are controlled. All within the boundaries of what is considered “in-network.”
In simple terms, in-network providers are those who have agreed to contract rates with the insurer. Out-of-network providers haven’t. When members stay in-network, costs are predictable, and the plan controls the economics. When they go out-of-network, the costs are higher, harder to manage, and sometimes exposed to balance billing.
This article explores how group benefits insurers are adapting to an environment where in-network strategy is no longer optional. We will examine how network design is changing, how employers are responding, and why the future of group coverage is being built on access that is controlled, curated, and in-network.
Why In-Network Is Becoming Central to Group Benefits Strategy
The appeal of in-network care starts with economics. Providers who join a network agree to fixed reimbursement rates. That gives insurers and self-funded employers visibility into what they will pay for services. It also defines what members can expect to pay. There’s no guesswork, and no surprise billing.
A 2021 Health Affairs study found that prices for out-of-network services in employer-sponsored plans were often significantly higher than in-network equivalents.
That delta between what can be forecast and what can’t is at the heart of why in-network is becoming the structural focus. Employers are no longer satisfied with a network that technically includes most providers. They want networks that work in practice, not just on paper.
Employers Are Demanding More
From the employer’s perspective, in-network strategy is now a matter of plan performance. In 2023, the average premium for employer-sponsored family coverage hit $23,968, up 7% from the year before, according to the Kaiser Family Foundation.
Broad networks alone do not check that box anymore. In fact, they can be part of the problem. A provider can be “in-network” and still drive high costs if contracting is not strategic. That is why many employers are pushing insurers to create tiered networks or high-performance subsets — not to limit access, but to focus it.
One major insurer’s internal data showed that clients using its high-performance network (limited to roughly 30% of its broader provider base) saw 10% lower total cost of care. When employees complain about a surprise bill or a provider mismatch, the question often comes back to the carrier – why wasn’t that in-network?
Regulation Has Raised the Stakes
If employer demand is the business case for in-network strategy, regulation is the structural reinforcement.
The Affordable Care Act laid early groundwork by capping annual out-of-pocket costs – but only for in-network services. In 2024, those caps are $9,450 for individuals and $18,900 for families. Anything spent out-of-network doesn’t count.
The No Surprises Act (effective January 2022) added legal weight to the in-network imperative. It prohibits balance billing in many emergency and hospital-based scenarios, forcing insurers to settle payment disputes directly with out-of-network providers through arbitration. For group benefits insurers, this changes the risk calculus. It is no longer just about protecting the members. Now, the plan itself absorbs the cost of gaps in the network.
Arbitration is not free either. By mid-2023, more than 330,000 disputes had been filed – a volume far exceeding projections. For insurers, each one is a friction point and a cost center.
Meanwhile, mental health parity rules are quietly doing the same thing. Insurers must now prove that their in-network mental health access is comparable to physical health. If members routinely go out-of-network for therapy or psychiatry, that can trigger a compliance review.
Emerging Trends in Designing Smarter In-Network Models
Insurers are responding.
UnitedHealthcare’s Core network now includes about 45% of its broader PPO base but is growing in adoption. Blue Cross Blue Shield’s High Performance Network excludes high-cost outliers and advertises up to 20% lower spend. Cigna’s LocalPlus offers an in-network-only footprint tailored to metro markets, targeting 15–18% savings compared to its Open Access Plus network.
These are not fringe offerings. They are becoming core products. As transparency rules force plans to publish their negotiated rates, carriers are using that data to continuously refine their provider lists. They are removing low-value outliers and flagging duplicate charges.
That shift has triggered a wave of innovation, from leaner provider panels to tiered reimbursement structures to in-network-only plan types that look and function very differently from legacy PPO models.
Narrow Networks and High-Performance Networks (HPNs)
The concept of a narrow network used to be met with skepticism. The assumption was that fewer providers meant more disruption. But over the past few years, that idea has matured. Narrow networks today are less about “less” and more about better.
High-performance networks are a prime example. These aren’t just smaller networks. They are selective, built around providers who meet predefined cost and quality benchmarks. Blue Cross Blue Shield’s High-Performance Network (BlueHPN) now operates in over 65 metro areas and promises 11% to 20% lower total cost of care compared to their broad PPO network. The savings come from excluding hospitals and specialists with above-average costs and weaker outcomes.
Other carriers have followed suit. Cigna’s LocalPlus targets cost-sensitive urban markets with a leaner in-network footprint and up to 18% savings versus its Open Access Plus network.
But success depends heavily on geographic precision. A narrow network that works in Chicago may not work in Atlanta. That is why these models are often positioned as market-specific options, not national defaults.
Still, there are tradeoffs. Narrow networks raise the stakes on network adequacy. If a member can’t find an in-network provider for a needed specialty, it is not just a service issue. It can become a regulatory problem.
Tiered Networks
Not all employers are ready to cut the network in half. That is where tiered networks come in. These designs keep most providers in-network, but steer members toward preferred options using financial incentives.
In a typical tiered plan, Tier 1 providers (those with better outcomes or lower costs) carry lower copays and coinsurance. Tier 2 providers are still in-network but come with higher cost-sharing. This structure lets the plan influence behavior without cutting out access entirely.
UnitedHealthcare’s Nexus ACO product uses this model. Members pay the least when they stay within a curated ACO (accountable care organization) network but can still access broader in-network care if needed. Other insurers take similar approaches using designations like “preferred” or “high-value” providers.
Tiered networks also allow insurers to respond to regional variation. In markets where excluding a major hospital system would cause backlash, a tiered design can offer that system as Tier 2 – still available but not incentivized.
The challenge is communication. If members don’t understand the tiers, or find them hard to navigate, the design falls flat. But when done well, tiered networks create a behavioral nudge toward lower-cost, higher-quality care.
EPOs and In-Network-Only Plan Types
Some employers are opting for plan types that eliminate out-of-network coverage altogether, with few exceptions.
These are often Exclusive Provider Organizations (EPOs). PPO-like structures that use broad in-network access, but do not reimburse out-of-network care except in emergencies. For insurers, this removes the burden of repricing out-of-network claims and reduces the risk of balance billing. For employers, it means tighter control over total spend.
EPOs are gaining traction as a middle ground between traditional PPOs and more restrictive HMOs. Anthem’s BlueHPN, for example, is offered exclusively as an EPO, making its performance-focused savings possible without the leakage of OON claims.
Cigna’s LocalPlus, too, is structured as in-network-only. So is Aetna’s newer “Performance Network” offering in certain markets, which combines CVS Health clinics with a streamlined specialist network.
These models rely on one thing – network adequacy. If the in-network options cannot support timely, local access – the model fails. That is why most insurers offer these plans selectively, after verifying provider coverage density.
Direct Contracting and Custom Network Builds
For large, self-insured employers, the strategy sometimes goes further – build the network directly.
Companies like Boeing and Walmart have led the way by contracting directly with health systems or Centers of Excellence (COEs) for specific services. These arrangements bypass the insurer’s standard network and allow the employer to negotiate terms, track outcomes, and offer bundled payments.
While not feasible for every employer, this trend has influenced how insurers structure their own networks. Many now offer direct-to-employer network models or allow employers to carve out parts of their network. For example, using a specialized vendor for behavioral health or musculoskeletal care while maintaining the rest of the plan in-network. Some carriers, like Aetna (through CVS), are building vertically integrated care experiences that function like internal networks.
Extending the In-Network Footprint
As networks get tighter, they are also getting wider. Not in the traditional sense of adding more doctors or hospitals, but in how access is delivered and experienced.
Insurers are expanding the reach of in-network care through virtual-first offerings, condition-specific centers of excellence, and composite network architectures. This shift allows plans to control cost and quality without sacrificing access, even as they move away from traditional PPO sprawl.
Virtual Care and the Rise of COEs
The pandemic made telehealth a necessity, but the shift has proved durable. Virtual care is now a standard part of most in-network offerings, especially in employer-sponsored plans. Nearly every large insurer has moved to embed national virtual providers as in-network partners.
This matters because it decouples access from location. In rural areas, or for specialties like behavioral health where in-network supply is often thin, virtual care fills the gap. Cigna is offering in-network video therapy and psychiatry across all 50 states. UnitedHealthcare offers Virtual First plans that route members to a virtual primary care team as their front door, with referrals into the physical network as needed.
The regulatory backdrop is also shifting. Several states now require parity between virtual and in-person mental health access.
Centers of Excellence
Not all care needs to be local, especially when the stakes are high. That’s the logic behind Centers of Excellence (COEs).
A COE is typically a hospital or surgical center with superior outcomes in a specific area –cardiac surgery, joint replacement, oncology, transplants etc. These centers are in-network by design, but they are selected based on strict performance criteria.
Employers and insurers use COEs to steer members toward higher-value care while controlling costs. Blue Cross Blue Shield’s Blue Distinction Centers are in-network facilities vetted for quality in areas like maternity care and bariatric surgery. Cigna and Aetna both maintain surgical COE networks with bundled pricing and performance guarantees.
This is in-network contracting at its most selective. Instead of excluding providers broadly, the plan draws a tight circle around specific services. It’s like saying “if you need a spinal fusion, these five providers are your in-network options.”
The result of this expanded footprint is a more resilient and adaptable network strategy. Plans can deliver broader access without compromising cost control or clinical quality.
Crucially, this evolution lays the groundwork for value-based care models.
Conclusion
In-network care has always been the preferred route in group benefits. But today, it has become a deliberate, high-stakes design decision. It is constantly reshaped by economic pressure, regulatory change, and employer demand.
Across the market, insurers are responding. Networks are being streamlined, not just for cost, but for clinical performance. Plan designs are pushing members inward, toward curated pathways. Telehealth, Centers of Excellence, and direct contracts are extending reach without sacrificing control. Even as networks get smaller, access is becoming more expansive, and more intentional.
At the same time, out-of-network care is receding into the background. Insurers are not building around it. They are building away from it.
“In-network” is no longer just a list of participating providers. It is an ecosystem. It includes virtual-first care, performance-based contracting, modular components, and digital tools to help members navigate it all. It is smarter, more layered, and more responsive.
For group benefits insurers, the challenge is how their networks can deliver value, access, and accountability at the same time. In this new era of plan design, network strategy is not just a technical detail. It is the product.