by Gintas Garsys

While level-funded health plans offer an appealing middle ground between fully-insured and self-funded options, agents and brokers should be prepared to have an honest conversation about the realities of these plans with group clients. In a recent article, Gintas Garsys, Regional Director of Group, Medicare & Health at IFC National Marketing, dives into the pros and cons of level-funded plans and what agents need to know when working with groups.

“The appeal of level funding is obvious,” said Garsys. “Predictable monthly payments with possible year-end refunds if claims run low. However, the amount of a potential refund is based on having a healthy employee population. A single unexpected diagnosis can eliminate any surplus, and renewal rates adjust accordingly.”

Level funding can also require more administrative involvement than fully-insured plans, as employers are required to review monthly claims reports, understand stop-loss triggers, and explain more complex benefit structures to employees.

For organizations that have a healthy workforce with a stable claims history and engaged leadership, level funding delivers real value. The key is setting realistic expectations from day one. 

“Position level funding as a tool for cost transparency and potential savings over time, not guaranteed immediate reductions,” said Garsys. “The most successful implementations happen when clients understand the trade offs and the level of involvement needed to make this approach successful for their organization.”

Ready to dive deeper?