For business · Small group alternative
Level-funded plans for small employers
A fixed monthly payment, a claims account behind it and stop-loss cover on top. For a healthy small group it can undercut fully insured — with conditions worth understanding.
In plain words
Self-funding with the edges sanded off
A level-funded plan splits your monthly payment into an administration fee, a stop-loss premium and a claims fund. You pay the same amount every month, the insurer carries the risk above the stop-loss point, and any surplus in the claims fund may be returned at the end of the year, depending on the contract.
The catch is that it is underwritten. A group with significant claims history may not be offered a level-funded rate at all, and a group that is offered one will be re-underwritten at renewal.
- Monthly cost is fixed and known — the variability sits with the carrier
- Claims reporting you can actually read, which fully insured rarely gives a small group
- Surplus sharing spelled out in the contract before you sign, not after
- An honest view of what happens if your claims year goes badly
What we handle
What we check before recommending one
Census underwriting
Whether your group will be offered a competitive level-funded rate at all.
Stop-loss terms
Individual and aggregate attachment points, and what triggers each.
Surplus treatment
Whether a good year returns money, and on what timetable.
Renewal risk
Re-underwriting, and the exit route back to fully insured if it goes badly.
Questions
What people ask us about this
Fully insured pools your risk with everyone else and charges a filed rate. Level-funded prices your group on its own expected claims, which helps a healthy group and hurts a sick one.
Not beyond the fixed monthly payment, provided the stop-loss is structured properly — that is precisely what it is for. What you can lose is the surplus you hoped to get back.
Typically groups from about ten employees upward with a reasonably healthy census. Below that, the underwriting swing is usually too sharp to be worth it.
Talk it through with a person
Our help costs you nothing. We are paid by the carrier you choose, and your premium is the same whether you enrol with us or on your own.
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