What are Level-funded Health Plans?

Level funded health plans
 
When it comes to finding a health plan that works for you and your employees, it’s not exactly a walk in the park. That’s why an additional option of health care plans, known as level funded health plans, is rising in popularity. A level funded plan has similarities to fully insured and traditional self-insured health plans, but it actually falls somewhere in between.

Level funding is a form of self-funding because you self-insure, but you pay a “level” or steady fee each month, which your third-party administrator determines. After paying your level monthly fee for a year, your third-party administrator will compare what you’ve paid with the actual claims made throughout the year.

If there’s a difference and you ended up overpaying, you will get refunded the difference. Thus, with level funded health insurance, you get the regular and predictable costs of a fully insured plan, but you also only end up paying for the healthcare costs actually incurred by your group’s plan.

What are the Benefits of Level Funded Health Plans?
It’s important to compare health insurance plans when shopping for affordable health care so that you make the smartest decision possible. With that said, take a look at the benefits that level funded health plans can offer you and your employees.

  • They are not subject to several key regulations of the Affordable Care Act (ACA):
    • They don’t have to offer a package of mandated benefits.
    • Level funded plans are also not subject to state-mandated benefits.
    • Because these plans are self-insured, business owners don’t have to pay the Health Insurance Tax imposed by the ACA.
  • They offer predictability through set monthly payments and prefunded terminals.
  • You get to tailor your plan or change it based on your employees’ needs, which makes level funded plans very flexible.
  • You also get all of the same benefits of traditional self-insurance:
    • Greater flexibility than fully insured plans
    • As much as 3% immediate savings because state taxes are eliminated on most self-insured plans
    • Elimination of carrier profit margins

Level funding helps companies remain competitive by attracting and retaining talent. You also know exactly how your health coverage dollars are being spent, and your monthly payments never fluctuate during a plan year. Plus, there’s a greater potential for savings because at the end of the year, if your employees’ claims are less than the annual claims funding, your company gets that money back. That’s what makes level funded health plans one of the most affordable health care options—you ultimately end up paying just for the healthcare that was needed and used.

Who is Best Suited for Level Funding?
Whether you’re in the market for small business health insurance or you have a regular-sized business and are looking for the health plan that fits best, level funding may most definitely be for you. If you’re still not sure, ask yourself the following questions:

  • Are you looking for an affordable option that still lets you offer employer-sponsored benefits?
  • Are you interested in self-insuring, but don’t want the risk of unpredictable monthly costs?
  • Do you want to establish a culture of health and wellness?
  • Do you have 10 or more employees?

If you answered yes to these questions, then congratulations! Level funded health plans are for you. Keep in mind that in order to make the most of level funding, you should give administrative responsibilities over to a healthcare services partner that is an expert in the healthcare industry. This healthcare services partner should be able to prove they can do the following:

  • Provide quality customer service
  • Adjudicate and pay claims on time
  • Prepare detailed claim reports
  • Negotiate, obtain, and renew stop-loss placement

The best health insurance companies and partners have your best interests at heart. It’s their priority to make sure you’re happy and satisfied with their service. If you don’t know where to look for such services, ask trusted people for recommendations and look at reviews online. Navigating health coverage doesn’t have to be complicated, exhausting, or frustrating. With the right information and the right help, you can find the best plan for your company and your employees.

Contact EMI Health Today for Information on Our Level Funded Health Plans
Fortunately, EMI Health is one of those health insurance companies that you can trust and that will always provide top-notch customer service. We offer level funded health plans (also called modified self-funded health plans) suited for your company. If you have any questions about this type of plan, we are happy to answer and help. We also offer fully-insured and traditional self-funded group health plans and Utah individual dental plans. If there’s any type of health insurance plan you have a question about, we’re here to help. Contact us today by calling 1-800-662-5851 (ask for the sales team) or by visiting www.emihealth.com.


Sources:
http://www.consultbb.dreamhosters.com/docs/Level_Funding_2.pdf
http://www.helioshr.com/2014/07/level-funding-vs-self-insuring-whats-right-for-your-business/
http://www.cigna.com/assets/docs/business/small-employers/826929_h_level_funding_v5.pdf
http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/level-funding-growing-popularity-among-employers?page=full
http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/level-funding-growing-popularity-among-employers?page=0,0
https://levelfunded.com/#FAQ
http://www.benefitspro.com/2015/03/09/the-rise-of-self-funding