Under a fully-insured plan, the monthly premium costs are locked in. Even if a group is healthy and have no claims, the savings are kept by the insurance company.

With the Level Funding Plan, and the smart use of Stop loss Insurance, the employer pays a monthly cost that is the maximum cost. No matter how much claims are in a month, the employer will never pay more than this monthly cost. After the all claims are paid for the year, the unused money in the claim fund is returned to the employer.

  • Defined and contained Risk – The employer’s maximum exposure and annual costs are determined up front through the purchase of Stop Loss insurance. Standard provisions include coverage for claims paid after the end of the plan year (no terminal liability exposure)
  • Stabilized Cash Flow – Maximum annual claim liability is equally spread over 12 months. If the employer’s claim fund does not contain sufficient money to cover claims, the Stop Loss insurance coverage will advance the necessary funds (also referred to as “Accommodation). No requests for additional money from the employer are made.
  • Claim Fund – After the claim run-out period remaining funds are released or rolled over to the next year as credit. This is the essence of alternative funding - money not spent on benefits remains with the employer’s benefit plan, not the insurance company.