Level Funded Health Plans
Level Funded Health Insurance Plans for Employers
A level-funded health plan is a hybrid between fully insured and self-funded coverage: the employer pays a fixed monthly amount, claims are paid from a dedicated fund, stop-loss coverage limits exposure above a set threshold, and unused funds may be returned at year-end.
Prior to level-funded plans, business owners faced a tough choice between inflexible traditional plans and the uncertainty of fully self-funded models. Level funding offers the adaptability of self-funding without the unpredictability — allowing effective budget management while maintaining control over healthcare expenses. Third-party administrators (TPAs) ensure proficiency in claims processing and customer service, while stop-loss insurance protects against unexpected claims.
How Level Funding Works
- Fixed Monthly Contribution: You pay a predictable monthly amount
- Claims Fund: Contributions fund an account used to pay employee claims
- Stop-Loss Protection: Kicks in if claims exceed a set threshold, capping your exposure
- Surplus Returned: If claims run lower than expected, unused funds may be returned to you at year-end
Who Is Level Funding Right For?
Level funding tends to be the right fit for small to mid-size employers who want predictable monthly costs, but also want access to their claims data and the potential for savings that fully insured plans don’t offer.
Important Benefits of a Level-Funded Health Plan:
- Owe no more than the monthly fixed cost
- Opportunity to receive credit for the upcoming year
- No obligation to renew
- Receive monthly reports for evaluation
- Various plans are available
While we’re proud to call Pennsylvania our home, we’ve helped businesses all across the country manage their risk and we look forward to helping you, too – no matter where it is that you call home.
Our Benefits Management Services Approach
We offer a full complement of benefits from the nation’s premier insurance partners, and our experienced employee benefits consultants can help you develop a package that’s right for your workers and your budget. Our approach is consultative and solutions-based.
Your Outsourced Partner
Choosing the right funding structure for your benefits plan is a significant decision. We help you weigh level funding against fully insured and self-funded options, so you understand the tradeoffs before committing.
360 Degree Approach
We take a 360-degree view of your business to ensure all aspects are secure. Our team of experts in Loss Control, Employee Benefits, HR, and training are all available to our commercial clients, ensuring multi-pronged risk mitigation.
Value Added + Tailored Solutions
In addition to access to our highly experienced benefits and HR consultants, we think you need another layer of protection. A 2015 study found U.S. employers face about a 12% chance of an employee claim that could result in a lawsuit — compliance, documentation, and HR best practices are your main defense. Many employers encounter unpredictable, sizable expenses that are hard to prepare for. We're committed to customized solutions for each unique situation, guiding you toward a level-funded plan that ensures consistent, predictable payments while helping you choose the most suitable coverage for your business and employees.
Level Funded Health Plans FAQs
A fully insured plan transfers all risk to the carrier for a fixed premium. A level-funded plan gives employers more control and potential savings, with claims paid from a dedicated fund rather than absorbed entirely by the carrier.
Stop-loss insurance kicks in once claims exceed a predetermined threshold, protecting the employer from catastrophic, unpredictable costs.
Yes — one of the key advantages of level funding is access to monthly claims reports, giving employers visibility that fully insured plans typically don't provide.
It depends on your workforce's health profile and claims history. Employers with healthier, more stable claims experience often see the most savings compared to a traditional fully insured plan.
