What are Level-Funded Insurance Plans?
Level-funded health insurance plans are a hybrid of traditional fully-insured plans and self-funded plans. Level-funded plans have the same look and feel as traditional small group health plans, yet offer the advantages and savings of self-funded benefits programs. Carriers created Level-Funded Insurance Plans when ACA compliant plans started to come on the market. These plans are offered by top carriers such as United Healthcare, Blue Cross Blue Shield, Humana, and Aetna.
In most cases, we find we’re able to save our clients 30% or more on their health insurance premiums without sacrificing coverage or raising deductibles.
Level-Funded Insurance Plans
How Do Level-Funded Insurance Plans Work?
Just like your current health plan, Level-funded plans feature fixed monthly payments with simple plan design options. Level-funded plans are not subject to state premium taxes and offer easy administration. The fixed monthly payments of a Level-funded plan include stop-loss insurance and do not fluctuate based on claims activity. This means there are no extra charges if claims are high, so employers will never have to pay more than the maximum monthly cost. While self-funded health plans are often criticized for the employer’s potential to lose money, a Level-funded plan eliminates this risk.
United Healthcare offers a brief explanation on how level-funded plans work, please click the link above to learn more, United Healthcare All Savers Level-Funded Plan White Paper to download it.
Who Are Level-Funded Insurance Plans Good For?
Companies interested in Level-funded plans can have up to a max of 100 employees and as few as 2 or 3, depending on the carrier.
Here are a few reasons to consider a Level-funded health insurance plan for your small business:
- You need greater control over your health care dollars, year after year because your costs are based on your employees
- Your health care costs are much lower than those of a traditional, fully-insured health plan, and are not required to bundle in state-mandated benefits
- You are refunded money at the end of the year if your claims do not exceed projections
What If We Have A Lot Of Claims?
One reason not to consider a Level-funded insurance plan is if you have high claims volume currently. High claims volume could disqualify your company from participation in the plan or you could risk an increased renewal rate.
Are There Other Benefits to Level-Funded Insurance Plans?
That depends on the insurance carrier. Some carriers offer programs like wellness programs to help your workforce stay healthy and keep claims down. For example, United Healthcare partners with Rally®, which offers a program where users can set wellness goals and then get daily online help to reach them. UHC also offers Real Appeal©, a free weight loss program for individuals in their Level-Funded plan. Other carriers offer different programs.