We’ve talked before about how 2-tier health plans can effectively control costs through a direct hospital contract (Tier 1) combined with a national network (Tier 2).
Ready to explore a direct hospital contract strategy or want to see how a 2-tier structure could work for your organization? Learn more at https://memberlybenefits.com/2-tier-plan/Retry
The basic idea is simple:
When your plan contracts directly with a health system—like Northwell Health—it secures lower, pre-negotiated ratesfor hospital, facility, and provider services. That means the plan saves, and members save, because the cost of care itself is lower.
So, why not just let members discover that value on their own?
Because tier-1 utilization doesn’t happen automatically—it must be encouraged and guided.
Employers and plan sponsors pay network fees for access to the hospital contract, and the stop-loss carrier often gives an upfront discount assuming Tier-1 care will be used heavily. If members don’t use Tier 1, those expected savings—and the stop-loss discount—can evaporate.
That’s why smart plan design matters. The structure should steer members toward Tier 1 for maximum savings while maintaining broad access through Tier 2 for convenience and travel.
Here’s an example of a plan design that’s working well in the New York Metro area, featuring Northwell Health (Tier 1) and Blue Cross Blue Shield (Tier 2):
(Table on next page)
: Northwell–Blue Cross 2-Tier Plan
| Benefit Category | In-Network Tier 1 (Northwell Direct) | In-Network Tier 2 (BlueCard EPO) | Out-of-Network |
| Individual / Family Deductible | $0 / $0 | $500 / $2,000 | $1,000 / $2,000 |
| Individual / Family MOOP | $6,000 / $18,200 | $6,000 / $18,200 | $9,200 / $18,200 |
| Coinsurance | 100% | 100% | 70% |
| PCP Visit | $25 Copay | $35 Copay | Deductible / Coinsurance |
| Specialist Visit | $40 Copay | $50 Copay | Deductible / Coinsurance |
| Urgent Care | $50 Copay | $75 Copay | Deductible / Coinsurance |
| Emergency Room | $600 Copay | $600 Copay | Deductible / Coinsurance |
| Outpatient Surgery (Facility) | $500 Copay / Visit | Deductible + $1,000 Copay / Visit | Deductible / Coinsurance |
| Inpatient (Facility) | $500 Copay / Admission | Deductible + $1,000 Copay / Admission | Deductible / Coinsurance |
| Diagnostics (X-Ray & Lab) | Minor: $40 Copay / Visit Radiology: $50 Copay / Visit | Minor: $50 Copay / Visit Radiology: $75 Copay / Visit | Deductible / Coinsurance |
| Complex Imaging | $400 Copay | Deductible + $600 Copay | Deductible / Coinsurance |
| PT / ST / OT | $40 Copay | Deductible + $50 Copay / Visit | Deductible / Coinsurance |
The Takeaway
2-tier plans work best when members are guided toward Tier 1—not just told it’s there. Education, plan design, and communications all play a part in achieving the savings both the employer and stop-loss carrier expect.
Lower negotiated rates are only part of the story—the real results come when utilization aligns with the design.
The Takeaway
A 2-tier health plan isn’t just a trend—it’s a smarter framework for controlling costs without compromising care.
If you’re ready to explore a direct hospital contract strategy or want to see how a 2-tier structure could work for your organization, let’s talk. Learn more at https://memberlybenefits.com/2-tier-plan/Retry
