Health insurance costs can be a major burden for businesses, especially small and mid-sized companies. But what if there was a way to get more control over your healthcare spending while still offering great benefits to your employees? That’s where level-funded health plans come in.
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What Is a Level-Funded Plan?
A level-funded plan is a type of health insurance that combines the benefits of traditional insurance with the flexibility of self-funding. Your company pays a fixed (or “level”) monthly amount, which covers:
Claims funding – Money set aside to pay employee medical claims.
Administrative costs – The cost of managing the plan.
Stop-loss insurance – Protection against high-cost claims.
At the end of the year, if your claims are lower than expected, you get a refund or credit. If they’re higher, stop-loss insurance helps cover the extra cost.
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How Can It Save Your Business Money?
Lower Costs Than Traditional Insurance – With level-funded plans, you only pay for actual claims rather than a one-size-fits-all premium.
Potential Refunds – If your employees stay healthy and don’t use as much healthcare, your company could get money back at the end of the year.
Tax Savings – Many level-funded plans are exempt from certain state health insurance taxes, helping your business save even more.
More Transparency & Control – Unlike traditional insurance, you get access to claims data, allowing you to adjust the plan to fit your team’s needs.
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Is a Level-Funded Plan Right for Your Business?
Level-funded plans work best for companies with relatively healthy employees who want to take more control of their healthcare costs. If your company is struggling with rising premiums, it’s worth exploring this option with a trusted insurance advisor.
By making the switch, you could cut costs while still offering quality healthcare— a win-win for both your business and your employees!