Traditional Group Health
Group Health Insurance also known as “fully funded plans” are purchased by companies or organizations and then offered to their members or employees. According to the Kaiser Family Foundation, 46% of the American population are covered by these plans. The Insurance is offered at a reduced cost and premiums are split between the employer and the employee. These plans have minimum participation requirements in which 75% of participation is often required. Coverage could be extended to spouses and family members at an additional cost. Because risk is spread among insured persons, premiums are considerably lower than traditional individual health insurance plans.
When should I choose a Fully-funded plan?
Technically it is very difficult to predict what plan is more convenient for your organization. An individual assessment of your organization should be conducted where a benefits expert can determine if these plans are a suitable option. With fully-funded plans, the budget is more predictable and the employer will pay the same premium during the plan period, most likely for the larger employer, this is the best option.
Advantages of Fully-funded plans
- The risk is assumed by the insurance company
- Lower premiums on 50 plus employees
- Predictable Health Cost
We see you as part of our family! We offer a professional look at the needs of your organization and design a plan package that best fits you. Minimum information from your organization will allow us to start this journey for you.
Level and Self-Funded Plans
Many times, we feel more comfortable with things that have always been familiar to us. While conventional coverage is more comfortable for some, level-funded plans are becoming a great option for many small businesses. The Kaiser Foundation conducts studies that help see the trend where employee benefits are shifting
- 67% percent of covered employees, including 23% of them who work in small firms, have self-funded plans.
- Level-funded insurance modality: Among covered employees in small firms, 31% are in a plan that is either self-funded or level-funded
In a self-insured or self-funded plan, the employer assumes the financial risk of the Health policy. Your company pays a more affordable, fixed fee, plus medical claims as they come. The plan is funded by the employer and the employee. While paying as you go is advantageous when employees don’t file many claims, it could be risky when claims are made.
In level-funded plans just like self-funded plans, premiums are more affordable and predictable, a fixed monthly fee goes into the claims fund based on an estimate of eventual claims, plus an additional fee to handle the benefits management. Although they are similarities, there is a huge difference in that the level-funded includes a cash flow component with a cap on total possible costs, making your costs “level.”
Do you want to learn more?
The Riddle Family Insurance is known around the community as a leader in education. Make an appointment and one of our benefits experts will be glad to answer all your questions, leaving you satisfied with the information you need.