Which means that those employees not deemed higher quality will only get the minimum market rate of benefits.
This is the essence of competition. Increasing demands on employers pushes people who want to/would be willing to work for less completely out of the market.
People have to make decisions based on the most likely scenarios. Big companies can take advantage of the unlikely scenarios, for employees or for customers, because they average across large numbers of people. This is like a memory leak that defeats competition; it's not a flaw in the rationality of either party, but it is a real problem absent good regulation.