Even though level funding is a form of partial self-funding, it operates very much like an insured plan that small groups are accustomed to. The biggest difference is that unspent claim funds remain in the employer’s claim fund rather than with an insurance carrier.
Key Features of Level Funded Health Plans
Budgeting is Easy
In a level funded plan, the employer is able to budget for monthly fixed expenses such as estimated claim reserves, stop loss premiums and administrative costs. This enables the employer to budget for monthly expenses while enjoying the financial advantages of self-funding.
Risk Management Assured
Stop loss insurance protects the plan against catastrophic claims, both specific and aggregate. If total claims exceed the agreed funding limit, the excess claims are paid by the stop loss insurance carrier.
A Claim Fund is Maintained
In a level funded plan, a funding limit is determined and stop loss insurance is secured to cover claims that exceed that limit. The employer then deposits an equal amount in a separate claim fund each month and claims are paid out of this fund.
All Administration is Provided
J.P. Farley takes care of plan design, set-up enrollment and on going administration. ID cards and other required materials are provided, claims are processed and paid efficiently while the employer receives one monthly invoice and provides an update on enrollment.
10-Year Plan Cost:
Fully Insured Plan = $9,910,474
Self-Funded Plan = $7,959,867
At Least $1,950,607 Saved
by Self-Funded Health Plan
Take a Closer Look at Level Funding
J.P. Farley Corporation will work with you to determine if Level Funding can helpyour company better manage the risks and future costs of employee health care.