A solid health insurance plan is a vital part of a benefits package for employees, but providing such a plan is one of the largest expenses a business can have. This makes mitigating costs a top concern for employers everywhere. Level-funded health insurance may provide the best solution for employees and employers alike.
Most companies will either pay for a plan with fixed monthly premiums through an insurance company or assume the financial risk of providing health care benefits to its employees with a self-insured plan, paying for employees’ medical claims out of pocket.
While self-insuring can save large employers money, the unexpected monthly costs and risk of large claims can deter small employers from implementing this type of plan. Level-funded plans can offer the potential cost savings of self-insured plans while providing the security of a fully insured plan.
Good for Your Business
In a level-funded plan, your company pays a “level” fee each month to a carrier, which typically covers the cost of administrative fees, third-party administrators (TPA) and stop-loss insurance.
This fee is determined by the carrier and is often based on a variety of factors, including company size and past claims data. The carrier or TPA facilitates the health plan, including paying out claims.
At the end of the plan year, you may be entitled to a surplus refund if your company’s actual claims are less than projected. If the actual claims exceed what was expected, you’re protected from the unexpected cost with stop-loss insurance.
Benefits to your business include:
- You retain 100% of profits or surpluses. Our customers realize savings up to 25% annually over fully-funded options
- You pay level or flat premiums payments—just like fully-insured plans
- You have access to detailed claim data to make more informed decisions
Good for Your Employees
Level-funded plans can help mitigate your costs, but also benefit your employees in several ways, including:
- Customizable plan designs to meet the needs of your employees
- National carrier networks of doctors and hospitals, improving access to care when needed
- Unique features that will save your employees time and money
A level-funded health insurance plan is not right for everyone, but can offer cost savings in certain situations. Could it be the right option for your company? Contact us to find out.