Virtual care and health navigation company Included Health inked a deal to acquire Firefly Health to scale health plan alternatives for employers.
In January, Included Health launched an alternative health plan design for employers, broadening its existing all-in-one virtual care platform. Firefly Health, founded in 2017, is a primary care and health plan provider serving more than 20,000 individuals nationally.
The deal is expected to close in the third quarter of 2026. The companies did not disclose financial details of the acquisition.
"In some ways, this is very much of the moment and what the market needs, and in some ways has been a very long-term vision that I think both of us have shared for where the whole country needs to go in terms of its health plan offerings," said Owen Tripp, co-founder and CEO of Included Health, sharing the news with Fierce Healthcare in an exclusive interview. "We see in Firefly an opportunity to accelerate the whole alternative health plan space to give members more access, to give members better care and to give members better financial outcomes. And Firefly has been doing that for years."
The acquisition is a "perfect fit" as it enables Included Health to propel its "primary care-centric work in bringing a great health plan for members," he said.
Firefly Health built a clinically integrated health plan that has demonstrated more than 15% total cost of care savings across its full Administrative Services Only (ASO) book of business compared to a risk-adjusted market benchmark, according to Fay Rotenberg, CEO of Firefly Health. The company's model is increasing chronic condition outcomes by 50% to 80% while delivering 90% member satisfaction, she noted.
"The model is working and Included has the scale to enable us to be able to offer this to so many more employers across the country," she said in an interview with Fierce Healthcare.
These results are driven by combining NCQA-accredited team-based primary care with nationwide, quality-led navigation to high-value virtual and in-person providers, according to the company.
Included Health works with health plans and employers, including one-third of the Fortune 100. The company provides healthcare benefits and insurance navigation, as well as virtual primary care, behavioral health, specialty care, expert medical opinions and urgent care appointments. It rolled out its personalized AI assistant and chatbot—dubbed Dot—in December.
The pending acquisition will bring together Included Health’s AI-native, virtual care platform with Firefly’s clinically integrated health plan that integrates primary care with a nationwide near- and in-home care and specialty network. The combination creates a scaled, health plan alternative that is designed to deliver long-term savings for employers by connecting employees to better care through a modern experience with predictable costs, according to company executives.
U.S. employer healthcare costs are projected to escalate significantly in 2027, with PwC forecasting a 9% medical cost trend increase before employers implement plan design changes.
Included Health and Firefly share the core belief that investing in primary care and navigating people to quality is what actually lowers unnecessary costs, Tripp noted. "Together, we're giving employers a single, connected benefits experience that integrates plan design and administration, comprehensive care, and full system support to reduce friction, improve employee health, and lower costs," he said.
Included Health has a national clinical team, spanning primary care, behavioral health, specialty care and complex case management, that supports tens of millions of members, powered by an AI-native experience. Firefly Health "adds critical depth to that foundation," executives said, with an NCQA-accredited advanced primary care model, a nationwide ecosystem of 2,300+ in-person, in-home and specialty partners and a proven health plan model.
The two companies' missions have been aligned from the outset, Rotenberg asserted. "We're putting members first. We are both very oriented towards delivering not only clinical health but also financial health. We believe that having care at the core of any plan design is imperative, but then going a step further and aligning financial incentives is really how you close the loop to amplify that value," she said.
She added, "We are going towards the same thing, but we've sequenced the steps differently. Firefly started as a virtual-first advanced primary care. We built out an integrated physical facility network across all 50 states to be able to provide both in-person and in-home care in all 50 states. We have navigation capabilities to navigate within a broader national network."
Firefly made a foray into health plans first. In 2021, the company launched a new health plan benefit for employers. The company's plan architecture aligns incentives so that the highest-quality care is always the most affordable choice, Rotenberg noted. "When you do that, the clinical and financial results naturally follow," she said.
"[Included] started with the navigation, they have the care delivery, and now they have the plan design. We both believe that those four components, with the concierge member experience as tying all of that together, are critical to really create sustainable total cost of care savings without creating member friction or removing access to care, access and quality," Rotenberg said.
Tripp said the combined company will have four major differentiators as it targets the health benefit needs of employers—nationwide care delivery, which includes urgent care through primary and specialty care, network optimization, a dynamic plan design and the concierge member experience.
He noted that Included Health, with the acquisition of Firefly Health, can optimize networks to give employees "better access to higher-quality physicians in their local and national areas, and not just narrow the network, but actually provide real access, real selection and real curation to the very best of the best."
"The vast majority of other alternative health plans are really operating in only one or two of those levers, so they're simply narrowing a network. They're only providing the dynamic plan design." Rotenberg said. "We believe that in order to provide real sustainable year-over-year savings without degrading access to care or quality, you need to have all four. I believe that we will be the only company in the market that can say that as an independent entity."
According to data from WTW, 41% of employers currently utilize alternative health plan designs, with another 46% planning or considering adoption within two years. These changes aim to control soaring medical expenses while avoiding aggressive cost-shifting to employees.
"It's fair to say that you know nearly half of employers are either actively thinking about or will be thinking about alternative health plans. What sets us up to really be different than the others is that we are independent, so we're not tied to an existing carrier, and we have all four levers that we believe can result in sustainable total cost of care management," Rotenberg said.