When trying to leverage talent, small businesses often look to their benefits offerings to attract and retain employees. However, benefits can be quite costly, especially for small companies. There are several ways to fund a health insurance plan that can help make the costs more manageable. A level-funded insurance plan provides the cost-saving benefits and flexibility of a self-funded health insurance plan, coupled with the fixed payment structure of a fully-funded plan.
Level funded insurance plans include fixed costs charged per covered employee. Regardless of claims, these costs do not change. If claims are lower than anticipated, the employer can receive a refund of excess claims from the insurance carrier.
The employer purchases both individual and aggregate stop-loss insurance policies to protect the company from catastrophic claims. Similar to the deductible a plan participant would have, these coverages include deductibles the company is responsible for, and any claims exceeding the deductible are reimbursed by the stop-loss insurance.
Level funded plans offer flexibility in plan design. Using the data provided by the carrier, the employer can also offer benefit features that meet the needs of their employee population.
Level funded insurance is a great option that can help a small business effectively balance both the cost and risk of a health insurance plan.