When it comes to choosing a health insurance plan for your small business, it’s essential to understand the options available. Two popular types are the small group level funded health plans and the traditional fully insured health plans. Each has its distinct advantages and considerations, and selecting the right one can significantly impact both the employer and employees.

Cost Efficiency

One of the primary benefits of a small group level funded health plan is cost efficiency. These plans typically involve paying a fixed monthly fee, but unlike fully insured plans, a portion of the  surplus of claim reserves not used is returned to the employer. This setup can lead to significant savings, especially if claims are lower than expected.

Customization and Flexibility

Level funded plans often provide more flexibility and customization compared to fully insured plans. Employers can choose specific offerings that match their employees' needs while also having more control over their health benefits program. This custom approach can be particularly beneficial for businesses with diverse workforces, ensuring that the offered benefits align with the unique needs of different employee groups.

Transparency and Control

With level funded plans, there’s increased transparency regarding how funds are being utilized, as employers receive detailed reports on claims and payments. This transparency allows businesses to better manage their healthcare costs by adjusting the coverage or wellness programs based on real data.

Stability and Predictability

Despite potential savings, fully insured plans offer stability with fixed costs that are not subject to fluctuations based on claims. This predictability can be beneficial for budgeting and financial planning, eliminating the unpredictability of potential high-cost claims exceeding expected levels.

Choosing between these plans depends on various factors, including the company’s financial goals, risk appetite, and employee needs. Exploring both options and consulting with a knowledgeable healthcare broker or consultant can help tailor a plan that offers the best combination of benefits and cost-effectiveness for your business.