5 tips for employers considering a level funded health plan
Benefits are typically one of the largest expenses1 for employers, but an increasing number of organizations may be finding a way to reduce costs while also maintaining or improving coverage.
Employers who are seeking to maximize the value of their health benefits may choose a level funded health plan — a health plan option that moves away from a fully insured funding model but without the financial uncertainty of traditional self-funding.
Compared to fully insured options, level funded plans are designed to offer two main upsides: financial predictability and cost savings, including through the potential of a surplus refund.
Here’s how it works: employers pay a fixed monthly cost to cover claims, administrative fees and stop-loss insurance, which can help protect against unexpectedly large claims — and if claims are lower than expected, the employer may be able to keep some of the savings at the end of the year.
Employers with level funded plans from UnitedHealthcare paid on average 22% less than for comparable fully insured plans.2
Here are five strategies to consider when transitioning from a fully insured plan to a level funded plan:
1. Request an underwriting analysis
Consider requesting an underwriting analysis to review your company’s previous medical claims and other relevant factors to determine if a level funded plan may make savings possible for your organization. The analysis can be coordinated by an insurance broker or by connecting directly with a health insurance company that offers level funded plans.
2. Invest in virtual care options
Virtual care, also known as telehealth, may offer employees a more convenient and affordable way to access medical services — and for more than just urgent care. Some level funded plans offer additional ways to use virtual services, including primary care, chronic condition management and behavioral health support.
3. Consider wearables for wellness
With a level funded plan, it may become more important to help employees and their families play an active role in their health. A wellness program supported by a wearable device can equip employees with a smartwatch or activity tracker, enabling them to earn financial incentives for meeting certain daily targets, which may be used to help pay cost sharing for certain health care expenses.
4. Integrate additional benefits
Research increasingly shows dental and vision health are closely connected to overall health and well-being. In fact, regular preventive dental care can help keep people keep their teeth and gums healthy and reduce risk of conditions like cardiovascular disease.3 A comprehensive eye exam can help detect a variety of health conditions, including diabetes, heart disease, high blood pressure and more.4
Employers moving to a level funded plan should consider maintaining or adding coverage for dental and vision services to help streamline benefits, create better experiences, improve health outcomes and reduce costs.
5. Dial into the data
Unlike most fully insured plans, employers with a level funded plan may receive detailed monthly data reports that can be used to help understand how employees are using their health plan benefits. This can enable tailored clinical interventions and communication campaigns designed to help reduce suboptimal outcomes such as avoidable emergency department visits or the use of out-of-network care providers and facilities, which are typically higher cost options for employees and employers.
Besides containing costs, a level funded plan may help contribute to an organization’s overall culture of well-being, including by:
- Encouraging a healthier workforce
- Increasing member engagement
One more thing: The Surest® health plan — the fastest growing commercial health plan from UnitedHealthcare — is now available in a level funded arrangement. The Surest plan is designed to make health care simpler by displaying upfront pricing and no deductibles. It enables members to make more informed choices by comparing costs, seeing provider Care Ratings and checking coverage details through the Surest app, so members better understand what costs to expect before receiving care.
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