What is Level Funded Health Insurance?
Level funding health insurance is an alternative to traditional fully insured plans that has gained popularity in recent years. It is a type of self-funded health plan where the employer pays a fixed premium each month, and the insurance carrier handles claims processing and administration.
One of the key benefits of level funding health insurance is cost savings. Since the employer is paying a fixed premium each month, they can potentially save money if claims are lower than expected. In contrast, with a traditional fully insured plan, the employer pays a set premium each month regardless of the amount of claims filed.
Another benefit is increased flexibility and control over plan design. Employers can choose the benefits and coverage levels that best meet the needs of their employees, rather than being limited to the options offered by a traditional insurance carrier. This can be particularly beneficial for small and mid-sized businesses that may not have the bargaining power of larger employers.
Level funding health insurance also typically includes stop-loss insurance, which limits the employer's liability for large claims. This provides added protection against catastrophic losses and can help prevent unexpected financial hits to the company.
Finally, level funding health insurance plans often provide more detailed claims data than traditional fully insured plans. This information can be used to identify patterns and trends in healthcare utilization, which can help employers make more informed decisions about plan design and wellness initiatives.
Overall, level funding health insurance can be a cost-effective and flexible option for employers looking to provide quality healthcare coverage to their employees.