Level-Funded Plan

Level-Funded Plans: A hybrid of self-funding and traditional insurance. You pay a fixed monthly amount for administrative costs, stop-loss insurance (protection against high claims), and expected medical claims. If your team's medical claims are lower than expected, you can get a refund or surplus cash back.

That last sentence is the whole point. On a fully-insured plan, a good claims year is the carrier's good year. On a level-funded plan, it is yours: the surplus in the claims fund comes back to you at the end of the year, often 50 to 100 percent of it depending on the contract. So every claim that comes in below what the carrier expected is money you see again. Level funding is how employers from about 25 to a few hundred employees get the upside of self-funding without the open-ended risk, because the stop-loss and the fixed monthly payment cap what a bad year can cost.

This is where TruePrice Care fits. When an employee on a level-funded plan has a knee replaced at a bundled cash price instead of the in-network hospital rate, or gets an MRI for $359 instead of $1,800, that difference does not vanish into a carrier's margin. It stays in your claims fund and comes back as surplus. The same steerage that lowers a self-funded employer's spend lowers a level-funded employer's spend, and the refund check is where it shows up.

The takeaway: if you are level-funded, read the surplus provision in your contract. The share that comes back to you, and when, is the number that turns every avoided overcharge into cash.