With fully insured plans, premiums are paid directly to the insurer.
A claims account is exactly what it sounds like. A portion of the monthly payment is used to pay for claims submitted by plan members.
Stop-loss is an employer’s safety net. This protects the employer against higher-than-expected claims. With level-funding, employers will never have to pay more than the amount they are responsible for funding the claims account each year. After that, stop-loss insurance kicks in.
Administrative services are provided to the employer so they can spend their time focusing on their business while a third-party administrator handles plan management such as paying claims, customer service, and other administrative tasks.
Opportunity for a refund
Say a group submits fewer claims than expected in a year. A portion (or all, depending on the plan selection) of the difference between the group’s anticipated and actual claims is refunded back to the employer. Not only can employers potentially reduce their health care costs by switching to a level-funded plan, but the potential refund acts as additional savings on top of that.
What else is different?
The basis of level-funded plans is the accuracy of the rates that are unique to each group. Employers should not pay more for health coverage than is needed.
Self-funded plans are not subject to certain Affordable Care Act requirements, however, employer-established self-funded plans with Allstate Benefits meet minimum essential coverage standards and preventive services are paid at 100% when received from in-network providers, as recommended by the Affordable Care Act.
As always if you have any questions abut Level Funding Health insurance contact your group health insurance experts at Total Benefit Solutions, Inc (215)355-2121