Level funding isn’t for every group health insurance plan, but if it works for your business, it could mean a substantial savings in health care costs. With increases expected in 2016 and beyond, switching to this model might stand to save you not only this benefits renewal season, but for years to come.
- You are an employer that struggles to find affordable group health insurance for your employees.
Let’s face it, health care is expensive! Offering this valuable benefit to your employees can serve as a reason for your talent to stay with you or leave for another opportunity. To combat the increases the market is seeing in traditional group health insurance premiums, carriers have started to offer an alternative – level funding. With level funded health insurance, you only pay for the health care claims your group uses. Stop loss insurance is built in to protect you from excessive or out of ordinary claims as well.
Any money that is left over at the end of the year from your claims fund is returned to you as cash or as a premium reduction for the next year. This could mean a substantial decrease in health insurance costs depending on your employee’s claims.
- You have a healthy group of employees.
There’s nothing like paying premiums every month and knowing that your group is healthy and barely visiting the doctor’s office. It seems like wasted money. Since level funding allows you to pay only for the claims your group makes – a healthy group makes for the best case for a level funded health insurance strategy.
- You have a workforce that is predominantly young and male.
The way group health insurance rates are determined is dependent on a number of factors. In simple terms, age and gender are paramount when it comes to rating your group. If you have several younger male employees, level funding allows you to avoid something called “community rating” where all employees are treated equally regardless of age or gender. Statistically speaking, young males are less likely to file as many claims, which in turn allows insurance carriers to offer a lower rate on the overall premium amount.
- You want to design your own health plan.
In a level funded health insurance scenario, you are free to choose carriers and plans that work for your company. You are not tied to any one plan design.
- You want to see full claim information.
Knowledge is power. With level funding, you’ll receive data about your claims, which allow a better understanding of where your claims fund is going. This information can help you modify your plan design in the following year to target specific areas and increase or decrease coverage.
Contact Us to find out if level funding is right for your group.