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Questions To Ask When Acquiring Level Funding Insurance

March 4, 2021, by New City Insurance

happy co workers who are discussing their Level Funding insuranceSmall businesses that wish to manage their health insurance costs are now considering a unique funding strategy known as level funding. Level funding is a self-funding solution that works in conjunction with most standard health plans to deliver predictable plan costs. Employers only pay for health care that employees actually use.

Will Level Funding Work For My Company?

Level funding is not the right solution for every business but can be highly advantageous to companies that meet basic requirements. For example, this insurance is best suited for employers with a healthy workforce as this helps to keep the cost of premiums to a minimum. Level funding insurance is also a great choice for companies that want payment predictability and do not want to pay for unused coverage.

Understanding This Insurance

It combines the cost savings of self-funding with the predictability of fully-funded plans, giving employers the best of both worlds. A level-funded health plan consists of four main components, including administrative costs, aggregate stop-loss coverage, individual stop-loss coverage and claims. Together, these components offer businesses a range of benefits, such as cost savings, flexibility and looser regulatory requirements compared to traditional, fully insured plans.

What Should I Ask When Considering Level Funding?

business workers learning what level funding is and how it could work for their companyMany small businesses are not large enough to operate with the risks involved with a self-funded plan. What makes this insurance option so attractive to these smaller businesses is that it includes built-in stop-loss coverage that can help cover larger, unforeseen claims. In simple terms, a business that chooses level funding insurance will never pay more than their monthly premium. However, they can enjoy a surplus if they experience a good year.

When deciding to switch, consider the following questions:

How Many Employees Do You Have?

Level funded health plans are based on the underwriting of a workforce’s claim experience and health status. The cost of premiums is also based on the number of employees a business has, as this can alter aspects like the cost of stop-loss coverage. Businesses that benefit most from level funding include those with a relatively stable workforce, allowing for great predictability of future claims.

Are Your Employees Healthy?

When considering whether to acquire level funding insurance, businesses should always consider the health of their employees. With level funding, an employer only pays for claims that the group actually makes. This means that if an employer has relatively healthy employees who do not visit the doctor frequently, premiums can be kept relatively low.

Do You have Experienced Benefits Brokers?

Working directly with experienced benefits brokers can make a significant difference in the outcome of a business’s group health insurance efforts. Businesses that partner with a knowledgeable broker can enjoy strategic health and benefits solutions that aim to save money and keep employees happy and healthy. Benefits brokers can recommend plans based on unique factors that impact the business and can help negotiate contracts to ensure that the business secures the best pricing possible.

Can You Accommodate To A Variation in Claims?

Predictability is one of the top reasons that many businesses select level funding. Businesses can enjoy pre-established monthly payments that are based on past claim experience and the number of employees. However, that does not mean that the cost of insurance never changes. While the premium will not go up in the middle of the year, there is potential for changes in price resulting from high claims the previous year.

Finding Your Level Funding Plan

group of business workers at conference table learning what level funding isBusinesses that want to operate a level-funded health plan must consider all aspects of their decision, such as their company’s cash flow, employee numbers, risk tolerance and preferred budgeting methods. Having an experienced benefits broker that an employer can look to for guidance can be highly advantageous when comparing group health plans.

Consider Drawbacks, If Any

There are drawbacks to any type of health or medical plan, regardless of the number of advantages. Review these potential downsides to determine if the good outweighs the bad. One of the biggest issues is that this type of plan does not follow the ACA’s medical loss ratio (MLR) rule. Also, known as the 80/20 rule, this rule states that carriers must spend a minimum of 80 percent of collected premiums on health care. Any excess premium charged must be rebated.

Talk To The Level Funding Professionals

Level funding insurance can offer many benefits to businesses, but employers need to understand the potential trade-offs they are making when switching to level funding. To learn more about this insurance or to speak with insurance professionals about acquiring a plan, speak to New City Insurance’s self-funding insurance experts today.

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Carol Zhang
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04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
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20:14 03 Mar 22
New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
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I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
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Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
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So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
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So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
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Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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