Level Funding in Simple Terms

This week, we're going to talk about level-funded health insurance.

At Carepath Benefits, we offer level-funded health insurance plans, and we wanted to do a very basic, high-level explanation of how a level-funded benefit plan works.

In future articles, we'll get into the mechanics behind it, some of the boring stuff, and how money moves.

But today, we're just going to keep it super simple.

When you are new to the industry and hear the words "level-funded", "self-funded", "self-insured", or "fully insured", and you're not sure what those terms mean, you are not alone.

We felt it would be helpful to break down what level-funding means in simple terms for brokers, employers, and CFOs, so you can understand if this may be an option for you in the future.

Level-funded is simply that: it's level.

It means that the employer group signs up for a health plan and pays 12-level premium payments to a third-party administrator (TPA). The TPA then takes that premium and essentially puts the money into three different buckets.

To continue to see how we break this down simply, click HERE!