Globalcare ConsultingLevel-funded & self-funded
Level-Funded Group Plans
Level-funding replaces a fixed insurance premium with a fixed monthly claims budget — priced off your own group’s risk instead of a community rate, with stop-loss insurance capping the downside. If your group has a healthy year, the leftover comes back to you.
Not available everywhere — check here first
Before comparing costs, confirm your state even permits this for a group your size.
Permitted for small groups, subject to a state-required minimum stop-loss attachment point of $20,000 per covered person.
NY law bars insurers from issuing new stop-loss policies to groups of 50 or fewer. Only legacy policies from before 2015 can still renew — effectively closing this path for most small NY employers.
No minimum attachment point for small-group stop-loss, so level-funded arrangements are open to small groups here. Georgia’s stop-loss requirements sit in its multiple-employer (MEWA) rules, which do not govern a single employer’s level-funded plan.
Where the money actually goes
One fixed monthly payment, split three ways.
Claims fund
Covers expected medical costs based on your group’s census.
Stop-loss premium
Insurance that caps your exposure if claims run high.
TPA admin fee
Pays the third-party administrator handling claims and paperwork.
At year-end
Claims came in low
Unused claims-fund dollars are typically refunded to you.
Claims came in high
Stop-loss covers the excess — you don’t owe more than your fixed payment.
Three funding models, side by side
Level-funding is deliberately positioned between the other two.
| Category | Fully insured | Level-funded | Self-funded |
|---|---|---|---|
| Who bears claims risk | Carrier | Employer, capped by stop-loss | Employer, capped by stop-loss |
| Monthly cost | Fixed premium | Fixed payment | Variable, tied to actual claims |
| Pricing basis | Community rating | Your group's own risk | Your group's own risk |
| Year-end refund possible | No | Yes | Yes, as retained surplus |
| Best fit | Any size, predictable budgeting | Small-to-mid groups, healthy workforce | Larger groups with cash flow flexibility |
Where the risk actually sits
Real considerations before switching. Level-funding tends to work best for groups with a relatively young, healthy workforce — a group with major ongoing conditions may not see savings materialize. As the plan sponsor, your business becomes an ERISA fiduciary with real compliance obligations. And if a bad claims year pushes costs above projections, most carriers don’t require repayment, but expect renewal rates to rise the following year.