Get the benefits and savings of self-funding without the risk. Level-funded health plans deliver savings and flexibility for smaller employers, combining the predictability of traditional plans with significant cost reductions if annual claims are lower than anticipated.
A level funded health plan (also known as a partially self-funded plan) is a type of health insurance plan that delivers three primary benefits to small employers:
- the potential for cost savings
- more opportunities for plan customization
- and reduced regulations.
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Brian Pierce
Senior Business Development Consultant
217-451-9187
brianp@consociate.com
As with any health plan, the insurance carrier estimates what they think an employer’s group policy will charge for the year (including claims, administrative costs, and individual and aggregate stop loss coverage). The employer will pay a set amount to the insurer based on this estimate. The difference with level funded health plans is that if the claims are lower than expected, the insurance company will refund part (or sometimes all) of the unused funds back to the employer. This means that employers enjoy the predictability and financial safety of a traditional health plan, while realizing significant savings if claims are lower than planned.
In addition to the budgeting aspect and potential cost savings, level funded (and self-funded health plans) give employers access to claims data, utilization information and prescription data. This information can be used to design a healthcare plan that meets the unique needs of that employer.
Consociate Health can assist you in deciding which funding arrangement is right for you or your client. Contact us today.
