Level Funding

Level Funding is a partially self-funded plan in which the employer contributes a steady monthly payment to cover cost for administration, claims payment, and stop loss insurance. Level funding has it's advantages when compared to fully insured plans and programs. Most Level Funding plans require ten enrolled employees; however, some will accept a minimum of two in Georgia.

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Discovering the Benefits

Seven Advantages of a Level-Funded or Self-Funded Small Group Health Plan

1. Underwriting Based on Type of Business, Age, Sex, Health, and Lifestyle - With a fully funded plan, the healthier and younger groups must subsidize the cost for older and less healthy groups. The underwriting process used for self-funded health plans allows you to be charged the correct amount for your group, rather than being included in a community-rated traditional plan.

2. Tax Savings - Employers with self-funded (ERISA) plans to save on state insurance taxes and some ACA taxes. The ACA "HIT" tax does not apply to self-funded plans. This is a large cost to insurers of fully insured health plans.

3. Not Subject to State Mandates - Carriers selling fully insured plans must spend large amounts of resources to comply with the hundreds of different state mandates. With a self-funded plan, the employer selects benefits that work best for the employees. This feature creates savings similar to those promised through being able to "buy across state lines."

4. More Latitude in Plan Designs - With a self-funded plan, an employer is allowed to select the benefits that work best for their specific business. There are a large number of deductibles, co-pays, prescription benefits, and other options that allow for custom designing a plan that works best. The employer is not limited to the "one size fits all" metal plans.

5. "Money Back" from Claims Fund - In years that claims are less than funded, the money left over in the claims fund belongs to the employer.

6. Monthly Claims Reports - The employer receives monthly claims reports showing where healthcare dollars are being used. This information can be used by the employer and advisor to design a plan that works best for the specific business and its employees.

7. Lower Costs - Savings may result from underwriting, fewer mandates, more latitude in plan design, tax savings, and a refund of claims funds. In many cases, these savings are significant.