Why Employee Benefits Matter in M&A Readiness
In this episode of Cascade Conversations, Unlocking the Benefit Advantage, Eric Green – Managing Director, Cascade Partners is joined by Jason Glime, President of Spartan Benefit Advisors, to discuss why employee healthcare benefits are a critical—but often overlooked—factor in sell-side M&A readiness. They explain that benefits are typically the second- or third-largest P&L (Profit & Loss) expense, and can materially impact EBITDA and valuation if reviewed strategically rather than treated as a last-minute HR item.
The conversation highlights common red flags, including reactive benefit renewals, lack of claims transparency, and missed opportunities to control costs. Jason outlines how growing companies can use claims data, alternative funding models, and employee education tools to reduce expenses while maintaining quality care. The discussion emphasizes that proactive benefits management not only improves valuation, but also supports smoother employee transitions during a sale by maintaining satisfaction and stability.
Cascade Conversation Summary:
Eric Green opens the conversation by framing benefits within the broader context of middle-market M&A. While owners and management teams naturally focus on revenue growth, margins, and cost of goods sold, healthcare benefits frequently represent the second- or third-largest expense on the P&L. Despite their size and influence on cash flow, benefits are often treated as an afterthought rather than a strategic lever in value creation.
Jason Glime shares his background and Spartan Benefit Advisors’ approach, emphasizing their focus on challenging the status quo in how companies manage benefits. Serving organizations with 50 to 1,000 employees, Spartan works with leadership teams to shift benefits from a reactive, renewal-driven exercise to a proactive, data-informed strategy—particularly critical for companies preparing for a potential transaction.
A central theme of the discussion is valuation impact. Because businesses are typically valued on a multiple of EBITDA, even modest reductions in a large cost category—such as healthcare—can have a disproportionate effect on enterprise value. Jason explains that many companies scrutinize property and casualty insurance or cyber risk in diligence preparation but overlook benefits, despite the significant opportunity to reduce costs while improving employee experience.
Eric and Jason explore the operational and cultural dimensions of benefits optimization. Jason likens the process to fixing “leaky pipes” before selling a house: tightening up benefits ahead of a sale reduces risk, improves optics with buyers, and supports a smoother post-transaction transition. From a cultural standpoint, well-managed benefits contribute to employee satisfaction and stability—both of which are critical during ownership changes.
The conversation then turns to common red flags Jason encounters. One of the most prevalent issues is timing: many companies only review benefits 60 to 90 days before renewal, which limits strategic decision-making. Jason advocates for earlier, more deliberate planning that includes analyzing claims data, evaluating funding structures, and assessing whether fully insured plans still make sense as organizations grow.
As companies scale, Jason explains, they gain leverage and access to greater transparency. Larger employers can begin to understand where healthcare dollars are actually being spent and how employee behavior influences costs. He illustrates this with a simple but powerful example: the same MRI can cost $1,500 at a hospital and $300 at an independent imaging center, yet employees are rarely aware of the difference. With the right tools, employers can guide—and incentivize—employees toward high-quality, lower-cost providers, improving outcomes while reducing expenses.
Eric underscores that these tools are not just about cost containment, but also about quality and outcomes. Modern benefits platforms allow employees to compare providers based on both price and performance, enabling smarter healthcare consumption without compromising care.
Jason further highlights the “80/20 rule” in healthcare: roughly 20% of employees drive 80% of claims. Effective benefits strategies focus on supporting this population with better information and resources, helping them make decisions that benefit their health, finances, and the company—without restricting access to care.
The Takeaway on Employee Benefits
The episode concludes with a clear takeaway for business owners and executives: employee healthcare benefits should be viewed as a strategic asset, not an administrative burden. When managed proactively, benefits can reduce risk, enhance employee satisfaction, improve EBITDA, and ultimately increase valuation—making them a critical component of sell-side M&A readiness.