Group Health Insurance Isn’t Just “Fully Insured” Anymore

Understanding Level-Funded & Self-Funded Options

For many employers, group health insurance has traditionally meant one thing: a fully insured plan with fixed monthly premiums paid to an insurance carrier. While fully insured coverage remains a common and viable option, it is no longer the only approach available to employers—and in many cases, not the most strategic.

Today, businesses of many sizes are exploring level-funded and self-funded group health insurance options as alternatives that can offer greater transparency, flexibility, and insight into healthcare spending when designed appropriately.

Fully Insured Group Health Plans

In a fully insured arrangement:

• Employers pay a fixed monthly premium
• The insurance carrier assumes all claims risk
• Rates are typically adjusted annually based on pooled claims experience

This structure offers predictability and ease of administration, but employers generally have limited visibility into what is driving healthcare costs.

What Is a Level-Funded Health Plan?

Level-funded plans are often described as a hybrid between fully insured and self-funded insurance.

Under a level-funded plan:

• Employers pay a fixed monthly amount, similar to a traditional premium
• That payment is allocated toward:
  • Expected claims
  • Administrative services
  • Stop-loss insurance to protect against large or unexpected claims
• If claims run lower than expected, employers may be eligible for a surplus refund, depending on plan design

Level-funded plans are often attractive to employers who want cost predictability while gaining insight into claims performance.

Understanding Self-Funded Group Health Plans

In a self-funded arrangement:

• Employers pay claims directly as they occur
• Stop-loss insurance is used to limit financial exposure
• Employers gain greater flexibility in plan design and cost management

Self-funded plans are commonly associated with larger employers but may also be appropriate for smaller groups depending on risk tolerance and long-term strategy.

How Insurance Solutions USA Helps

Insurance Solutions USA works with employers to compare fully insured, level-funded, and self-funded options side-by-side. Our role is to educate, evaluate, and help employers determine which structure aligns best with their workforce, budget, and goals.

If you have questions about your group health insurance options or would like to explore which funding structure may be appropriate for your business, our team is here to help.
Feel free to visit our website at www.insurancesolutionsusa.com or give us a call at 817-756-1442 to speak with a licensed insurance professional.