Level-Funding 101 – What is Level-Funding?
Level-funded health plans bring together the benefits of both fully-insured and self-insured plans, without the risk. Employers pay “level” premiums every month, and at the end of the year if claims come in less than the pool of premiums a portion of the unused funds may be returned to the employer. This approach gives employers the consistency and cost containment they need to provide great health benefits for their employees at a predictable price.
When compared to traditional fully-insured plans there are several key differences:
Traditional Health Insurance
Traditional insurance plans split premium dollars between plan administrative expenses and actual claims costs.
Studies have shown employers can save up to $120 per employee, per month, when coming from traditionally fully-insured plans. *