When it comes to providing health benefits, employers have a lot to consider—costs, coverage, and compliance, just to name a few. Traditionally, most businesses opted for fully insured health plans, where they paid a fixed premium to an insurance company, and in return, the insurer took on all the financial risk.
It may sound simple, but the catch—these plans don’t offer much flexibility, and employers rarely see where their money is actually going.
That’s where level-funded health plans come in. These plans work like a hybrid between self-funded insurance plans and fully insured coverage. This structure gives businesses more flexibility and potential savings. But one factor makes it even more valuable: transparency.
Transparency in Level-Funded Plans
One of the biggest advantages of level-funded plans is the ability to see exactly where healthcare dollars go. Unlike traditional fully insured health plans, where employers simply pay a premium and trust the insurance company to handle the rest, level-funded plan sponsors have access to claims data, allowing them to track healthcare spending in real time.
Such as:
- Have access to claims data for better decision-making.
- Can implement reference-based pricing to manage costs.
- Know exactly how much they’re paying for administrative tasks and fees.
- Can adjust their health benefits strategy based on real spending trends.
In short, transparency in level-funded health plans gives businesses more control over their healthcare expenses, making it a smart option for companies looking for a more affordable price while still providing coverage that meets minimum essential coverage standards.
Employers may receive a refund from the claims fund, creating potential cost savings. But if claims exceed projections, stop-loss insurance kicks in, preventing financial losses.
Benefits of Transparency for Employers
Transparency in level-funded health plans isn’t just about knowing where money goes—it’s about giving businesses the tools to manage costs effectively while still providing comprehensive coverage. When employers have clear insights into their healthcare expenses, they can make smarter financial decisions that benefit both the company and its employees.
Access to Claims Data
Having access to claims data gives employers a clear breakdown of their healthcare spending. Instead of paying a flat premium without any insight, businesses can see exactly where their money is going. This helps them identify cost drivers and trends, making it easier to adjust their health plans to prevent unnecessary spending.
With this level of transparency, employers can predict expenses more accurately and make proactive changes to control costs.
Easy Decision-Making
When employers understand their claims fund and stop-loss insurance costs, they can develop data-driven strategies for managing their health benefits.
Instead of guessing which administrative costs or employee claims are driving up expenses, they can make adjustments based on actual data. This also allows them to customize benefits to fit employee needs, ensuring they provide comprehensive coverage while staying financially sustainable.
Big Savings
Employers who leverage transparency in level-funded plans often see significant cost savings. By identifying high-risk areas, they can introduce targeted wellness programs to reduce high-cost claims over time.
This also helps cut down on unnecessary expenditures, keeping the monthly payments predictable and manageable. In fact, some companies have reported saving up to 25% on premiums by using data insights to refine their health insurance strategy.
Benefits of Transparency for Employees
When employees understand their health insurance and how their employer manages costs, they feel more confident in their health plans. Transparency leads to better decision-making, improved trust, and greater satisfaction with employer-provided benefits.
Healthcare Utilization
Transparency in level-funded health plans helps employees see how their personal healthcare costs are calculated. Instead of blindly following a plan, they can track their usage and make informed healthcare choices that align with their needs. When employees know the costs associated with their care, they are more likely to use health benefits wisely, reducing unnecessary visits and improving overall healthcare management.
Trust in Employer-Provided Benefits
When employers openly share how their insurance plans are structured, employees feel a stronger sense of fairness and openness in the process. Instead of wondering whether their employer is cutting corners on health benefits, they can see that the plan is designed with their well-being in mind.
This increased transparency leads to higher satisfaction with their health coverage, reinforcing trust between employees and the company.
Why Implementing Level-Funded Plans?
Switching to a level-funded health plan requires careful planning to ensure transparency and cost control. Employers need to assess their readiness, choose the right provider, and adopt best practices for managing their healthcare expenses effectively.
Before making the switch, businesses should:
- Evaluate organizational readiness – Consider the company’s financial health, risk tolerance, and ability to manage level funding with stop-loss insurance protection.
- Select the right plan and provider – Look for level-funded plans that offer full access to claims data, administrative costs, and health benefits insights.
The process for opting level funding can be complex, but health insurance brokers simplify the process by ensuring compliance with Affordable Care Act (ACA), nondiscrimination testing, and other compliance considerations.
As a trusted partner, IXSolutions provides expert guidance on level-funded insurance plans, connects businesses with top insurance carriers, and ensures a stable cost structure while maintaining cost control. With their support, employers can confidently offer comprehensive coverage at a more affordable price without sacrificing transparency.
The Bottom Line on Level-Funded Plan Transparency
Having a health insurance broker is great, but that doesn’t mean we should take a backseat when it comes to understanding our level-funded health plans. The more hands-on we are, the better we can navigate healthcare costs, claims data, and cost-saving opportunities. Transparency is about knowing where the money goes and using that knowledge to make smarter decisions for both the business and employees.
Let’s be curious, informed, and proactive about how our insurance plans work. The more we understand, the more control we have.
IXSolutions is here to help you navigate level-funded plans with clarity and confidence.
