What is Level-Funding?
Level-Funded Health Programs look like traditional small group health insurance plans and self-insurance. This allows small businesses to step outside of the ACA and provide their own health benefits. These plans normally include a stop-loss insurance policy that acts as a hedge against claims over the total funded amount monthly. Benefits could include significant monthly premium savings of 20-30% or more, as well as a potential refund that could exceed 3 months premiums.
How does Level-Funding work?
Similar to traditional group plans, level-funded plans have a set, or level, monthly premium throughout the year. Premiums are divided into three buckets. One-third pays employee claims, another third goes to plan administration, and the final third pays for stop-loss coverage. Stop loss protects business owners from self-insurance risks. Unused portions of the claims fund may be refunded if unused by the end of the run out period. Plan administration costs, broker fees and stop-loss premiums are not refundable. Should businesses exhaust a claims fund, employers are protected by a stop-loss policy on claims over the annual funded amount.
Call today to find out more about Level-funding 1 (715) 598-4412
What is Self-Funding?
Traditional self-funding is when an employer pays for their own medical claims directly, while a third-party administrator administers the health plan by processing the claims, issuing ID cards, handling customer questions and performing other tasks. Companies typically purchase stop-loss insurance. Stop-loss insurance that limits the amount of claim expenses the employer’s self-funded health plan is responsible for per covered individual per plan year. If claims are lower than predicted, the employer can save money directly, compared to paying the set monthly premium with a traditional fully insured plan, while the stop-loss insurance policy puts a ceiling on the maximum amount the employer would pay in claims.
Call today to find out more about Self-Funding 1 (715) 598-4412