Using Level Funded Coverage to Improve Service and Reduce Costs


Situation: Serving Employees without Breaking the Bank

Like many small businesses working with the Affordable Care Act, the costs of fully insured plans have been spinning out of control but the cost of self-insuring was daunting and at times more expensive with the added personnel.  One company decided to contact Finance Made Simple and find a new way forward to serve employees while controlling costs.

Behavior: Level Funded Coverage

Unlike fully insured coverage, Level Funded Coverage allows a company to self-insure but maintain many of the advantages of Full Coverage.  We matched our small business client with a self-funded plan that resulted in monthly fees that cover anticipated claims, stop loss funding and administrative services from a Third Party Administrator.

Outcomes: Lower Costs, Higher Satisfaction Affordable Group Health

The first cost that dropped was through the Third Party Administrator who operated more efficiently than large insurance companies.  With those cost savings as a start, the plans increased coverages for employees and the company was able to model claims to and get a refund on the monthly payments at the end of the year that was used to begin funding the next year.  Lower costs, higher coverage and better service.

Level Funded Coverage allows small businesses to be compliant with ACA, avoid fines and penalties and escape marketplaces that don’t have programs that work for their business. Level Funded Coverage is a hybrid between Fully Insured Coverage and Self Funding where a Third Party Administrator (TPA) manages your claims and administration costs to reduce errors and administration costs and serve your employees with better customer service.  You pay a monthly feee to the TPA to cover expected claims and stop loss insurance and at the end of the service period you are refunded the difference between what you paid and what actually incurred.  This is how insurance should work.

Find out more and Get a Quote today from Finances Made Simple, LLC.

P.S. – Did you know that you might be able to change your service provider mid-year?  Not all contracts end on a fiscal calendar.  Let us take a look – why wait to save money on your Small Group Health Insurance?