Level-funded plans
Steady monthly cost, with upside in a good year
A middle path between fully-insured predictability and self-funded control, increasingly popular with smaller employers.
How it works
You pay a consistent monthly amount that covers expected claims, administration and stop-loss protection. It feels like a fixed premium from a budgeting standpoint.
The difference is what happens at the end of the year. If your group’s claims come in below expectations, a share of the surplus can come back to you — something a fully-insured arrangement never offers.
Stop-loss coverage caps your exposure, so a catastrophic claim doesn’t become a catastrophic bill.
Suits employers who
- Have a relatively healthy, stable workforce
- Want visibility into their own claims data
- Can handle slightly more administrative complexity
- Are frustrated by renewal increases they can’t interrogate
- Want a route toward self-funding without the full leap
What to watch
Underwriting matters here. Groups are medically underwritten, so a population with significant claims history may not be offered attractive terms — or any.
The surplus is not guaranteed. A bad year means no refund, though the stop-loss keeps it from becoming worse than that.
Read the contract carefully on how surplus is calculated and when it’s paid, because arrangements vary considerably between carriers.
Worth running the numbers
We can price level-funded against your current fully-insured renewal and show you both.