Level-Funded Employer Group Health Insurance Plans

Balance Cost Control and Predictability with Level-Funded Plans

Level-funded employer group health insurance plans offer businesses a hybrid solution that combines the predictability of fully insured plans with the potential savings of self-funded plans. With level-funded plans, your company pays a fixed monthly amount to cover estimated claims and administrative costs. If your actual claims are lower than expected, you may receive a refund, making this option both cost-effective and financially predictable.

Loman-Ray Insurance Group is here to help you find the right level-funded plan that meets your business's unique needs, ensuring that you get the best of both worlds in terms of cost management and employee benefits.

Key Benefits

1. Cost Predictability: Pay a fixed amount each month, reducing the risk of unexpected healthcare costs.
2. Potential Savings: If claims are lower than expected, you could receive a refund at the end of the plan year.
3. Customization: Tailor the plan to meet the specific needs of your workforce, just like a self-funded plan.

How Level-Funded Group Health Plans Work

What Level-Funded Plans Cover

Level-funded plans typically offer comprehensive coverage similar to other group health insurance options, including:

• Preventive Care: Routine check-ups, vaccinations, and health screenings.
• Emergency Services: Coverage for emergency room visits and urgent care.
• Hospitalization: Inpatient and outpatient care, including surgeries and specialist visits.
• Prescription Drugs: Access to a wide range of medications.
• Mental Health Services: Coverage for therapy, counseling, and mental health treatments.

Differences Between Level-Funded, Fully Insured, and Self-Funded Plans

Choosing the right type of plan for your business involves understanding how these options differ:

• Level-Funded Plans: A fixed monthly payment covers estimated claims and administrative costs. If actual claims are lower than expected, your company may receive a refund, providing a balance between cost control and financial predictability.
• Fully Insured Plans: Your company pays a fixed premium to an insurance carrier with fully insured plans, which assumes the risk of covering employee claims. This offers predictability but can be more expensive, especially for a healthier workforce.
• Self-Funded Plans: Your company pays directly for employee medical claims with self-funded plans, assuming all the financial risk. This can lead to significant savings, particularly with a healthy workforce, but requires careful management of potential risks, including high-cost claims.

Small Group vs. Large Group Employer Plans

The size of your business affects how a level-funded plan will work for you:

• Small Group Plans: Designed for businesses with 50 or fewer employees. Level-funded plans are an attractive option for small groups because they offer the potential for savings without the unpredictability of a self-funded plan.
• Large Group Plans: For businesses with more than 50 employees. Large groups benefit from the financial predictability of level-funded plans while still having the opportunity for refunds if claims are lower than anticipated.

Optional Add-Ons for Level-Funded Plans

To enhance your level-funded plan, consider the following add-ons:

• Stop-Loss Insurance: Protects against high-cost claims, similar to self-funded plans.
• Wellness Programs: Encourage preventive care and healthy behaviors to lower overall healthcare costs.
• Dental and Vision Coverage: Add comprehensive benefits to your plan to attract and retain top talent.

Factors Affecting Level-Funded Plan Costs

Several factors can influence the cost and potential refund of your level-funded plan:

• Employee Health: The health and claims history of your workforce will affect the plan's overall cost and the likelihood of receiving a refund.
• Plan Design: The benefits you choose, including deductibles, co-pays, and coverage limits, will impact your fixed monthly payment.
• Administrative Costs: These are included in the fixed monthly payment but can vary based on the complexity of the plan and the services provided.

Tips for Managing a Level-Funded Plan

1. Assess Workforce Health: Understanding the health of your employees can help you choose the right level-funded plan.
2. Promote Preventive Care: Encourage employees to take advantage of preventive services, which can reduce overall claims.
3. Review Plan Performance: Regularly assess the plan’s performance to determine if it’s providing the expected benefits and savings.
4. Work with an Expert: Partner with a Loman-Ray agent to ensure your plan is optimized for your business's needs.

How Much Coverage Should Your Business Provide?

When designing your level-funded plan, keep these best practices in mind:

• Risk Management: Ensure you have sufficient coverage to protect against high-cost claims, potentially using stop-loss insurance.
• Employee Engagement: Customize the plan to meet the specific needs of your employees, which can improve satisfaction and reduce claims.
• Financial Planning: Plan for the fixed monthly payment while considering the potential for a year-end refund.

Optimize Your Healthcare Costs with Loman-Ray

Interested in the potential savings of a level-funded health insurance plan?

Fill out the contact form at the top of the page or call 888-566-2679 to speak to an agent today! Already have an agent? Find their local office information here.

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