They're similar, but they differ from a purely self-funded arrangement in important ways. Level Funded plans provide additional protection from large catastrophic medical claims with a stop loss insurance policy. So you won’t have to pay more for medical claims throughout the year or at the end of your plan year, even if you have high medical claims costs.

Your costs don’t change month to month. Similar to a traditional (fully insured) health plan, Level Funded plans lock in a fixed monthly payment for the plan year, regardless of your actual plan participant medical claims.

Your fixed monthly payment goes toward 3 things:

1. Your health plan that pays plan participants’ covered medical and pharmacy expenses. Every month, when you send in your regular payment, part of it is set aside to pay for your plan participants’ covered medical and pharmacy bills. In other words, when your plan participants go to the doctor, their eligible medical and pharmacy claims are paid straight from the money that was set aside. If the money that goes in during the year is more than what comes out, your health plan may get a surplus refund¹ after you renew your plan. If your plan participants have low medical and pharmacy claims, that refund could be substantial.
   
2. Administrative services for your plan, including plan participant onboarding, customer service, billing and medical claims processing, all done for you.
   
3. A stop loss insurance policy that protects your business if medical claims are higher than expected.

Every month when you make your payment, part of it goes toward stop loss insurance. This provides coverage for unexpected high medical claims.

Yes. And they’re included in your plan at no additional cost to you or your plan participants. Because they’re designed to help your plan participants get healthier, they may help lower medical claims and provide more savings for everyone.

The 2 biggest reasons: more potential savings and more control. With a fully insured plan, your health care costs may be based on a wider pool, including businesses that may have higher overall medical and pharmacy claims. A Level Funded plan is based only on your plan participants’ medical and pharmacy claims (groups 2–50 aren't subject to adjusted community rating). So when their medical and pharmacy claims are lower than expected, your health plan may get a surplus refund at year-end.¹

And because a Level Funded plan is a type of self-funding, your business may be exempt from many Affordable Care Act regulations and state premium taxes that can be costly for some businesses.

With a variety of plan designs and provider networks available, a Level Funded plan from UnitedHealthcare can be truly customized to fit your business. It’s worth your time to compare these health plans with your traditional (fully insured) plan to see which may be the better fit.