How does Level Funding work for you?
With Level Funding, you only pay for the claims incurred by your employees under your Level Funded plan. To help minimize the risk and protect your business, the stop loss insurance pays if the covered claims are more than what you are required to fund, so you don’t have to worry.
The aggregate stop loss will cover claims over a certain amount for the entire group and the specific stop loss will cover claims over a certain amount for a specific person.
You pay one fixed monthly payment, which goes toward the aggregate and specific stop loss insurance premium, administrative costs, and claims pre-fund account.
THE SET MONTHLY PAYMENT IS
DIVIDED THREE WAYS:
Specific Stop Loss
Aggregate Claim Liability
(Claim Pre-Fund Account)
Level Funding gives you the opportunity to manage your surplus.
If claim activity is favorable, you may have a surplus in the claim pre-fund account. When you select your Level Funded plan design, you may choose to either have your surplus returned as a premium credit or as cash back.
When is the surplus determined?
Groups with 10-200 covered employees will have their surplus determined in the 21st month (depending on the contract terms) after the effective date.