Q: Are Level Funded health plans the same as self-funded health plans?

<p>They&#39;re similar, but they differ from a purely self-funded arrangement in important ways. Level Funded plans provide additional protection from large catastrophic medical claims with a stop loss insurance policy. So you won’t have to pay more for medical claims throughout the year or at the end of your plan year, even if you have high medical claims costs.</p><p>Your costs don’t change month to month. Level Funded plans lock in a fixed monthly payment for the plan year, regardless of your actual plan participant medical claims.</p>

Question 1

Are Level Funded health plans the same as self-funded health plans?

Accepted Answer

They're similar, but they differ from a purely self-funded arrangement in important ways. Level Funded plans provide additional protection from large catastrophic medical claims with a stop loss insurance policy. So you won’t have to pay more for medical claims throughout the year or at the end of your plan year, even if you have high medical claims costs.

Your costs don’t change month to month. Level Funded plans lock in a fixed monthly payment for the plan year, regardless of your actual plan participant medical claims.

Question 2

How does a Level Funded plan work?

Accepted Answer

Your fixed monthly payment goes toward 3 things:

Your health plan that pays plan participants’ covered medical expenses. Every month, when you send in your regular payment, part of it is set aside to pay for your plan participants’ covered medical bills. In other words, when your plan participants go to the doctor, their eligible medical claims are paid straight from the money that was set aside. If the money that goes in during the year is more than what comes out, your health plan may get a surplus refund after you renew your plan. If your plan participants have low medical claims, that refund could be substantial.
Administrative services for your plan, including plan participant onboarding, customer service, billing and medical claims processing, are all done for you.
A stop loss insurance policy that protects your business if medical claims are higher than expected.

Question 3

What if one of my plan participants gets really sick or hurt?

Accepted Answer

Every month when you make your payment, part of it goes toward stop loss insurance. This provides coverage for unexpected high medical claims.

Question 4

Are wellness programs available?

Accepted Answer

Yes. And because they’re designed to help your plan participants stay healthy, they may help lower medical claims and provide more savings for everyone.

Question 5

Why choose a Level Funded plan over a traditional fully insured plan?

Accepted Answer

The 2 biggest reasons: more potential savings and more control. With a fully-insured plan, your health care costs are based on a wider pool, including businesses that may have higher overall medical claims. A Level Funded/All Savers plan is based only on your plan participants’ medical claims. So when their medical claims are lower than expected, your health plan may get a surplus refund at year-end.

And because a Level Funded/All Savers plan is a type of self-funding, your business may be exempt from many Affordable Care Act (ACA) regulations and state premium taxes that can be costly for some businesses.

With a variety of plan designs and provider networks available, a Level Funded/All Savers plan can be truly customized to fit your business. It’s worth your time to compare these health plans with a traditional fully-insured plan to see which may be the better fit.

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