LEVEL-FUNDED HEALTH PLANS
Pay less. Cover more. Keep the difference.
LEVEL-FUNDED HEALTH PLANS - how it works
Three buckets, one fixed monthly payment
Level funded health plans give small and mid-size employers the cost control of self-insurance — with the predictability of a fixed monthly payment and the potential to reclaim unused claim dollars every year.
- Claims Fund - Pays actual employee medical claims. *
- Stoploss Insurance - To protect from and pay catastrophically large claims.
- Administration Fees - TPA administration, network access, and plan management.
*unused funds are returned to employer
LEVEL-FUNDED HEALTH PLANS - types of benefits
Better coverage, not less
Level funded health plans give small and mid-size employers the cost control of self-insurance — with the predictability of a fixed monthly payment and the potential to reclaim unused claim dollars every year.
Custom Plan Design
Choose deductibles, copays, and coinsurance that match your workforce.
Direct Primary Care
Pair the plan with a DPC membership to reduce ER visits and provide same-day doctor access.
Rx Carve-Outs
Use a specialty pharmacy manager to cut specialty drug costs significantly.
Mental Health
Broaden mental health coverage beyond basic ACA standards, often at no extra cost.
Access Claims Data
Understand what factors affect costs and redesign benefits each year accordingly.
Wellness Perks
Tie contributions to biometric screenings and healthy behaviors under ERISA guidelines.
LEVEL-FUNDED HEALTH PLANS - Who benefits most
Who is the ideal employer?
If your fully insured renewal has increased by 15–30% above last year, level funding is worth a serious side-by-side comparison to avoid switching to a high-deductible plan and renewal shock.
Fully Insured
Insurer keeps surplus at the end of year
Level-Funded
Surplus returns to you at year end.
5-200
Employee Sized Firms
A good size for level funding.
These sized employers are large enough for risk pooling, yet small enough to benefit from self-insured economics.
Healthy
Workforces
Save the most money with a level-funded plan
Groups with younger or healthier employees are paying the most in traditional plans and stand to reclaim the most surplus.
LEVEL-FUNDED HEALTH PLANS - commonly asked FAQ's
Here's what to keep in mind for your next renewal
What happens if my employees have a high frequency or severity of claims
Stop-loss insurance shields you individually and at an aggregate level. If an employee’s claim surpasses a set limit (e.g., $50,000), the stop-loss carrier covers the excess. It also covers claims that exceed the aggregate limit, capping your worst-case costs.
Are level-funded plans subject to state insurance mandates?
No— level funded plans are self-funded ERISA plans, generally exempt from state benefit mandates. This can lower costs and increase design flexibility, especially in states with many mandates.
Do employees notice a change in their coverage?
Typically no — many employees see an improvement. They still receive an insurance card, use the same PPO or HMO network, file claims the same way, and interact with the same customer service. Employers often add enhancements like dental, vision, or telehealth during the transition.
Do pre-existing conditions in the group affect pre-existing conditions can affect level-funded plan premiums?
Level funding underwriters review past claims, but stop-loss protection is designed for high-cost claimants. High-cost groups may incur higher stop-loss premiums or exclusions, yet often save money compared to fully insured renewal rates.
How long does it take to switch to a level-funded plan?
Most employers transition at their annual benefits renewal date. The process — quoting, underwriting, and open enrollment — typically takes 60–90 days. A good broker can provide you with an accurate side by side comparison, pros, and cons and make the transition as seamless as possible.
LEVEL-FUNDING - TAKE THE NEXT STEP
How much could you be saving?
Take the next step and request a benefit analysis. A free benefits analysis from JS Benefits Group takes less than an hour and shows you exactly what your current plan is costing you — and what a better strategy would save. No pressure. No obligation. Just bottom line numbers.
Benefit Analysis Request Form
Fill out the form below and submit, and we will contact you as soon as possible to complete your FREE benefit analysis.
Savings Calculator
Adjust the sliders to estimate what level funding could save your company each year.
