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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

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