Employee Benefits
Unveiling the Key Differences between Level Funded and Self Funded Plans
Discover the differences between level-funded and self-funded employee health insurance plans.
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Each year, the Internal Revenue Service (IRS) makes inflation adjustments to Health Savings Accounts (HSAs) and qualified high deductible health plans (HDHPs). On May 24, 2019, the IRS released Rev. Proc. 2019-25 which included details on the inflation adjustments for 2020. The table below summarizes the maximum contributions to an HSA and the definition of a HDHP:
It should be noted that the maximum out-of-pocket limitations for HDHPs are different (lower) than the maximum out-of-pocket limitations permitted under the Affordable Care Act (ACA). In addition, any employer who has a Health Reimbursement Arrangement (HRA) that provides post-deductible reimbursements will need to ensure the HRA does not provide reimbursements until the minimum deductible has been satisfied ($1,400 for single coverage and $2,800 for family coverage) to preserve HSA eligibility for employees.
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