How Level-Funded Plans Create Stability

How Level-Funded Plans Create Stability

December 30, 2020

    Level-Funded Plans are growing in popularity due to their cost-saving potential, flexible plan design, and regulatory ease. At BHS, we believe in helping our clients enact plans that work best for their companies and their employees. We'll explain the benefits and drawbacks of using a Level-Funded Plan and help you determine if this type of plan is right for you.

    A Level-Funded Plan is a type of Self-Funded Plan where an employer pays a carrier a set amount monthly. These plans allow for a greater degree of flexibility, but the employer is responsible for the risks and responsibilities of medical claims. In the right hands, a Level-Funded Plan can help your company save money and provide tailor-made claims management. By paying a uniform monthly amount, Level-Funding removes the uncertainty of standard Self-Funding.

    • Savings – A health plan that's fully-insured mitigates risk. Self-insured plans place that risk on the employer, but reduce costs. A Level-Funded Plan is a great combination of both, making self-insurance more accessible to small business owners while still providing cost-savings.
    • Flexibility – Employers are responsible for more hands-on decisions and can control plan specifics. These plans are also exempt from a few ACA regulations, including the 80/20 rule.
    • Less Administrative Work – A small business doesn't need to hire additional administrative staff to manage a Level-Funded plan. This is great for paperwork reduction and cost-savings.

    Self-Funded Plans can be difficult for companies with less claims experience. There's also the risk of carriers taking advantage of the ACA 80/20 exemption to loosely define claim expenses. However, working with experienced employee benefits specialists and opting for Level-Funding helps protect your company from these risks.

    Working with BHS Insurance Agency means mitigating risks while still taking advantage of Level-Funding to save on expenses and keep plans flexible. Learn more about Level-Funding by contacting us at 616-531-1900, or click below.