A level funded health plan is an insurance arrangement in which an employer pays a health carrier a set monthly payment to cover the estimated cost for expected claims, administrative costs, and stop-loss insurance premiums.
What's the difference between self-funded and level 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.
Which is better self-funded or fully insured?
The biggest advantage of self-funding is the potential for cost savings. If employees are relatively healthy and don't use the health plan very much, the employer's costs will be lower than if the plan were fully insured.
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.