A level-funded plan is a type of self-funded plan in which the employer contributes a steady monthly payment to cover costs for administration, claims payments, and stop-loss insurance. Level funding has its advantages when compared to fully insured plans and programs.
What's the difference between level funded and self-funded?
A level-funded plan is carrier-based insurance. You pay a fixed premium with no room to change aspects such as TPAs or PBMs to adjust your price. Self-funded insurance limits fixed costs to 15% of the total cost of the plan.
What is a self insured plan?
Type of plan usually present in larger companies where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees' and dependents' medical claims.