Level Funding Creates a Company Atmosphere of Flexibility

November 13, 2017 | Varipro

A level-funded healthcare plan gives employers the benefits of a self-funded healthcare system, along with the consistency of a traditional healthcare plan. The significant difference being; even though employers are self-insured, they are still paying monthly premiums as if they were using a traditional plan.

How Does Level Funding lead to Flexibility?

The most appealing advantage of using a level-funded healthcare plan is greater flexibility within a company’s benefits plan, health care administration and budget. This is possible because of the following reasons:

1. Still Self-funding

Employers are still self-insured, avoiding traditional insurance companies’ “use it or lose it model”. They also evade choosing from the standard health care options and customize their plan, providing coverages that are only specific to their employee’s needs. Even though employers are still paying a consistent premium, prices are typically much lower than traditional plans as well.

2. Stop-loss Policy

In a level-funded plan, stop-loss policies must be included. In the rare case that costs exceed the premiums paid throughout the fiscal year, employers are well-protected from massive loss. 

3. TPA

Level-funding employers will typically use the services of a TPA, gaining all of the benefits that come along with them. Most importantly their insight on healthcare trends, claim activity and quality of care. Having access to this information allows employers to tailor their healthcare plan further and hold their local healthcare community to high standards.

4. Less Regulation

Level funded plans also avoid a bundle of federal and state (varies by state) regulations, giving employers control without being smothered by overbearing guidelines.

5. Refund

Unlike traditional plans, employers receive reimbursements for the unused portion of their paid premiums from that fiscal year. These dollars can then be used for next year’s premiums, making them even cheaper, and providing more funds for unexpected high costs.

Each of the above creates an employee benefits system that favors flexibility by giving more freedom to customize, useful information and money. Learn more how you can use Level Funding for your employee benefits system here: https://varipro.com/what-is-level-funding/