Is Level Funding Right for you?
If you desire the freedom of a self-funded insurance plan but need a little more certainty for your budgeting concerns, level funding might be an option for you.
Level funding is an option that can accompany a self-funded plan, aiding employers in their health coverage budgeting efforts. With level funding, employers pay a set amount each month to a carrier. This amount typically includes the cost of administrative and other fees and the maximum amount of expected claims based on underwriting projections, as well as embedded stop-loss insurance.
Pros:
- No community premiums
You only pay the claims and admin costs
you incur. - No lost money
You’ll get any leftover money back if low
claims lead to a fund surplus. - Better utilization reporting
You can better pinpoint potential areas
where employees could use more
education to make wiser health care
decisions.
Cons:
- Administrative fees
You pay more than just the cost of
claims. - Out-of-pocket claims costs
You’ll be responsible for paying
claims, so consider the worst-case
scenario of a high volume of claims. - Contractual impact
You’ll need an experienced expert to
guide you through this plan type, as
different businesses have different
needs.
Want to learn more?
We’re here to help you make the best decision for your company and its strategic goals. Contact Colburn Group for more information about coverage options. Call us at: 877-477-9650