Level Funded Health Insurance Coverage

Blend full coverage and self insurance to reduce risks and manage costs

Level funding is emerging as a third option for small group health insurance somewhere in between fully insured and self-insured. Proponents of level funding argue that it offers the benefits of both insurance models with none of the risks. So how does it work?

The “level” of level funding refers to the fact that you self-insure, but pay a level or steady fee each month as determined by your TPA. Level-funded plans also come fully integrated with individual and aggregate stop-loss insurance.

  • Individual

    Individual stop-loss insurance will kick in if a covered employee or dependent exceeds a certain dollar amount in claims.

  • Aggregate

    Activated above a certain dollar amount for all claims. After you pay your level monthly fee for a year, your TPA will compare payments vs. claims and refund the difference if you’ve paid more than you've spent.

In summary, you get the regular and predictable cost of a fully insured plan, but because you’re actually self-insured, you only end up paying for the healthcare costs actually incurred by your employees.

Benefits of Level-Funding for Small Business

  • Less Regulation

    Plans following this model are not subject to several key regulations of the Affordable Care Act, as in, they don’t have to offer a package of mandated benefits.

  • Customizable

    Because plans are self-insured, they can be written to the specifications of the business owner.

  • Lower Tax

    Plans are technically self-insured, business owners also avoid paying the Health Insurance Tax (HIT) levied as part of the Affordable Care Act.

  • Increased Control

    More control and discretion to approve claims. If you have an employee whose medical treatment would be denied under a fully insured plan, a level funded approach would let you cover it anyway, if you choose, as a gesture of goodwill.

An Example of

Level Funded Insurance Coverage

TPA Expenses

0%

Stop Loss Premiums

0%

Claims Paid

0%

Premium Savings

0%

Manage Your Benefits to Increase Coverage and Reduce Costs

Our professional team of insurers have a strong grasp on insurance solutions which can meet and exceed your needs. Start the conversation with our team to learn more about level-funded coverage and find out how much your small business could save.

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There are ways you could save 30% or more on your group health insurance! Fill out the form to get the conversation started.

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