Level-Funded Health Plans · Indiana
A level-funded plan gives a small or mid-size employer the savings and transparency of self-funding with the steady cash flow of a fixed monthly bill. And it can refund a share of unused claims dollars at year end.
For many smaller employers, it can be a first step out of a fully insured plan before considering a traditional self-funded structure. Our flagship client has saved $8.9 million over six years by moving off opaque carrier pricing. Compare self-funded plan support when you are ready for more control.
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How It Works
A level-funded plan bundles three pieces into one predictable monthly payment. The structure is what gives smaller employers self-funding's upside without the swing.
Is It Right For You
Level-funded isn't always the answer. Knowing when it fits, and what to check in the contract, is the difference between real savings and a repackaged carrier plan.
Too small for full self-funding's volatility but ready to leave opaque fully insured pricing. Level-funding is the natural bridge for most employers this size.
If you want claims transparency and a year-end refund opportunity but can't absorb monthly cash-flow spikes, level-funding gives you the upside with a fixed bill.
Refund formulas and renewal rate caps vary widely between carriers. A weak contract can claw back savings at renewal. The terms matter more than the headline rate.
Level-funded plans are medically underwritten. A group with significant known claims may be declined or rated higher, which is exactly when modeling alternatives matters.
FAQ
A level-funded health plan is a type of self-funded plan where the employer pays one fixed monthly amount that covers expected claims, plan administration, and stop-loss insurance. The employer pays member claims out of the funding account, stop-loss caps the risk, and if the group's claims come in lower than expected, the employer is refunded a share of the unused funds at year end. It gives smaller employers self-funding's transparency and savings with predictable monthly costs.
With a fully insured plan, you pay a fixed premium and the carrier keeps any unused dollars as profit. You never see your claims data. With a level-funded plan, your fixed monthly payment funds your own group's claims, you receive claims reporting, and a share of unused funding is refunded to you. Both have predictable monthly costs, but level-funding lets you benefit when your group stays healthy.
A traditional self-funded plan has variable monthly costs that track real claims, with stop-loss purchased separately and more active management required. A level-funded plan bundles expected claims, administration, and stop-loss into one fixed monthly payment with a year-end refund opportunity. Level-funding is the lower-volatility entry point; full self-funding offers more control and savings for larger groups.
Level-funded plans work well for employers from roughly 25 to 150 employees, often smaller than a traditional self-funded plan can support. They're the common first step for groups that want to leave fully insured pricing but aren't large enough to absorb the cash-flow swings of full self-funding.
They can. If your group's actual claims come in below the funded amount, most level-funded contracts refund a share of the surplus at renewal. That money would simply become carrier profit on a fully insured plan. The exact refund formula varies by carrier, which is why reviewing the contract terms before you sign matters.
Yes. Burt Advisory is based in Elkhart, Indiana and designs level-funded and self-funded plans for school systems, municipalities, manufacturers, and other Indiana employers. We model level-funded against your current plan, compare carrier surplus and renewal terms, and manage the plan through the United Benefit Advisors network.
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