The benefits of Surest Level Funded.
Level funded health plans are becoming an increasingly attractive option for employers looking to manage health care costs. According to the Kaiser Family Foundation Employer Health Benefits Survey, 42% of small firms reported having a level funded plan in 2024, up from just 7% in 2019.
What is level funding?
Level funding is a way to meet the needs of small or mid-size customers interested in transitioning from fully insured plans to self-funded. “Level funded plans play a really important role in helping small businesses find more affordable options,” explains John Terry, national vice president, small business sales and account management for Surest. It offers the simplicity and features of fully insured, with the possibility of getting money back when claims are lower than expected. Level funded plans are regulated by the Employee Retirement Income Security Act (ERISA). In comparison, the Affordable Care Act (ACA) regulates fully insured plans. Surest offers this funding arrangement for groups of two or more employees.*
Key benefits:
Predictable monthly payments: Level funded plans allow employers to make fixed monthly payments, helping in budgeting and financial planning. The funding is typically divided three ways: to pay employee claims, to pay for plan administration, and to pay for stop-loss coverage.
Risk management: These plans often include stop-loss insurance, protecting employers from catastrophic claims. This helps ensure risk is capped at a certain level, in case higher-than-expected claims exceed a specified amount.
Potential for refunds: In addition to clients budgeting for the year at a fixed monthly amount, they may receive a surplus refund if actual claims are lower than the maximum claims liability—or lower than anticipated—at the end of the plan year. When this happens, employers get a share of the surplus on their bill when they renew with Surest.
Customizable plan design: Level funded plans allow employers to tailor health benefits to fit their workforce’s needs.
Greater insights for cost management: Unlike most fully insured plans, level funded plans can also include detailed monthly reports with data employers can use to track health care usage that might increase engagement and help reduce costs. These insights can help employers inform members about:
- Substituting low-cost generic medications for brand names
- Choosing urgent care over the emergency room for lower costs
- Using virtual visits with primary care providers to save time and money
The initial response to Surest Level Funded has been impressive, says Terry, with brokers expressing their enthusiasm. It’s a great solution for those eager to offer their clients an “affordable, robust option with the potential for a surplus at the end of the year.” With the support of brokers—and a little more time in the market—Terry says he’s confident “Surest is going to change the game.”
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This content is not medical advice. You should always consult with your health care professional.
*Starting employee count varies by state.