A level-funded plan is a type of self-funded plan in which the employer contributes a steady monthly payment to cover costs for administration, claims payments, and stop-loss insurance. Level funding has its advantages when compared to fully insured plans and programs. Level-funded plans often cost less, making it easier for small- and mid-sized employers to offer their employees high-quality health care benefits at a more affordable price.
Total Benefit Solutions, Inc offers small- to mid-sized employers an opportunity to have a level-funded plan for their business through a Self-Funded Program. We work with many different carriers who offer level funded programs. These carriers change by State.
How does the plan work? Your monthly payments include
Claims account
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 insurance acts as an employer’s safety net, shielding them from unexpectedly high claims. With level funding, employers are only liable for the predetermined amount needed to fund the claims account annually. Beyond that, stop-loss insurance provides coverage.
Administrative Costs
Employers receive administrative services, allowing them to concentrate on their business while a third-party administrator manages the plan. This includes paying claims, providing customer service, and performing other administrative duties.
Opportunity for a refund
Imagine a group submitting fewer claims than anticipated in a year. A portion (or even all, depending on the plan selection) of the difference between the group’s expected and actual claims is returned to the employer. Employers not only have the chance to lower their health care expenses with a level-funded plan, but the potential refund offers exciting additional savings!
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 will 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.
Ask your Total Benefit Solutions, Inc group account manager if a level funded plan could work for your group! Contact us (215)355-2121.