For employers exploring alternatives to fully insured coverage, level-funded plans offer a hybrid approach that balances predictability with potential savings.
But how exactly do they work — and who are they best suited for?
What Is a Level-Funded Plan?
A level-funded plan combines elements of fully insured and self-funded models. Employers pay a fixed monthly amount that covers:
- Estimated claims
- Administrative costs
- Stop-loss insurance
If claims are lower than expected, employers may receive a refund at the end of the year.
Advantages of Level-Funded Plans
Predictable Monthly Payments
Similar to fully insured plans.
Potential Refund Opportunities
If claims are favorable.
More Transparency Than Fully Insured
Access to certain claims insights.
Potential Considerations
Level-funded plans still involve some underwriting and may not be ideal for every employer size or risk profile.
Who Typically Benefits Most?
- Employers with 25–150 employees
- Organizations with stable claims history
- Companies seeking moderate risk with upside potential
Final Thoughts
Level-funded plans can offer a structured transition between traditional and self-funded coverage.
👉 Want to see if this structure fits your workforce and budget? Schedule your free demo to review your options.