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Obamacare drove up health insurance costs for most small businesses, but a loophole in the law could save business owners thousands. Level-funded health programs resemble hybrids of traditional small group health plans and self-funded benefits programs. Here are a few reasons you’ll want to switch to a level-funded health insurance plan:
Unlike self-funded plans, level-funded payments are spread evenly across a 12-month period. Predictable payments make cash management easier on any small business. Included stop-gap coverage protects against cost spikes.
Traditional group policies unfairly use a broad community group to assess risk, while level-funded programs evaluate only a company’s employee risk pool. The results are often lower risks and lower cost plans.
Typically, one third of a level-funded premium is paid into a claims fund. Businesses get refunded any unused amount at the end of the year. Traditional plans keep all unused claims set-asides, forever.
Level-funded customers receive annual reports about plan utilization that identify areas of misuse or abuse. This gives businesses the opportunity to educate employees and further reduce costs.
Don't waste another minute stuck in an expensive health plan. A level-funded program gets you around certain Obamacare mandates and could replace your traditional plan in as little as five days.
Our partnership with Hiscox means you have the opportunity to save with custom-tailored health benefits programs. Find out how to put us to work for you.
Level Funded Health Programs resemble hybrids of traditional small group health insurance plans and self-insurance. This allows small businesses to step outside of the ACA and provide their own health benefits. Quality health insurance carriers with a rating of A- or better ( A.M. Best) handle the program administration. These plans typically include a stop-loss insurance policy that acts as a hedge against claims over the total funded amount monthly. Other benefits could include monthly premium savings of 30% or more, as well as a potential year end refund. 50% of businesses across the U.S. see refunds on these types of programs - and refund amounts are typically 2 months premiums.
Not unlike a traditional group plans, level-funded benefits programs have a set, or level, monthly premium throughout the year. Premiums are divided into three buckets. One-third pays employee claims, another third goes to plan administration, and the final third pays for stop-loss coverage. Stop loss protects business owners from self-insurance risks.
Unused portions of the claims fund may be refunded if unused by the end of the year. Plan administration costs and stop-loss premiums are not refundable.
Level-funded programs are utilization based in most cases, so businesses with healthier or younger employees could potentially save even more. Should businesses exhaust a claims fund, employers are 100% protected by a stop-loss policy on claims over the annual funded amount.
Level-funded programs do not pay premiums calculated with a community risk pool. Obamacare forces traditional group health plan participants into a large, potentially riskier group when forecasting claims. This is especially painful for small businesses. Level funding keeps premiums lower in some cases, because a company’s risk is lower than the general population.
Level-funded programs allow businesses to recoup unused claims set asides. Traditional group plan premiums are nonrefundable. In addition, level-funded programs include utilization reports, so business owners have detailed information about overspending. If used properly, this information could save the company even more. For example, employees could be reminded that urgent care facilities have lower claims than emergency room visits.
Call us at 1-800-280-0517 to see how level-funded programs could benefit your small business.
Level Funded Health helps companies in all 50 states save 30% or more on level-funded programs. We offer an alternative to traditional plans and the onerous expenses forced on small business by Obamacare. We generate quotes within 48 hours in most cases, which could save you thousands. Programs are initiated within five days in most cases.
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