Level Funding: A Smart Solution for Your Business

What is Level Funding?

Level funding is a unique health insurance option that combines the predictability of a fully insured plan with the cost-saving potential of self-insurance. It allows businesses to pay for their employees' health claims as they occur, offering both stability and the opportunity for cost reduction.

How Does Level Funding Work?

The Basic Mechanism

In level funding, a company pays a fixed monthly premium, which is used to cover health claims. This arrangement is managed by a third-party administrator. The premiums are consistent, offering businesses predictability similar to a traditional fully insured plan.

Financial Benefits

One of the key advantages of level funding is the potential for financial returns. If the health claims are lower than expected, the business may receive a refund at the end of the plan year. This offers an incentive for maintaining a healthy workforce.

Risk Management with Stop Loss Insurance

Protection in High Claim Scenarios

Level funding includes a stop loss policy, which limits the financial responsibility of the employer in case of high claims. In a year with significant health claims, the stop loss coverage ensures that the business is not financially overwhelmed.

Transitioning from Level Funding

Flexibility and Adaptability

If a business experiences a high-claim year or if their needs change, transitioning to a fully insured ACA plan is seamless and without financial repercussions, offering businesses the flexibility they need.

Why Choose Level Funding?

Benefits for Your Business

• Potential for lower monthly premiums
• Opportunity for refunds in low claim years
• Fixed monthly costs for easier budgeting
• Stop loss insurance for financial protection

Level funding offers an innovative way for businesses to manage health insurance costs while maintaining the security and predictability of traditional insurance plans.