Industry Perspective

Is a level-funded plan a good choice for my small business?

As an alternative to traditional, Affordable Care Act (ACA) health plans, Blue Cross and Blue Shield of Kansas offers BlueEdge level-funded plans. Designed for groups with 5-50 employees, BlueEdge plans are small business friendly, designed to help you share in the savings good health brings.

Basically, level-funded means your payment is capped at a set amount. Blue Cross will help you evaluate your maximum claims risk, then blend additional insurance coverage that begins paying after that amount. As a result, you’ll have peace of mind knowing your employer group can avoid unexpected high fees and can more accurately predict your healthcare budget.

How is level-funding different than traditional ACA plans?

  • Rates reflect your group’s claims experience. With a traditional ACA plan, rates reflect the experience of the entire small group market.
  • Risk is capped through additional coverage. With a traditional ACA plan, risk is capped through your fully-insured premium.
  • Reimbursement is possible when claims are lower than expected. With a traditional ACA plan, risk and reward is pooled and shared among the entire pool.

With a level-funded plan, the fixed employee monthly premium is made up of three parts:

  1. Claims costs. This covers the medical and pharmacy claims made by employees and their dependents. It is the maximum amount you will have to pay for any claims.
  2. Administration fees. This covers claims processing, customer service and billing.
  3. Built-in additional coverage. Also known as stop loss, this pays for costs above the annualized claims expense. It is financial protection for unexpected claims and ensures there are no additional expenses.

A level-funded plan may work for you if:

  • You’re a startup, small or midsize business with 5 to 50 employees who are generally in good health.
  • You want to give your employees more options to fit their budgets and their healthcare needs.
  • You want more flexibility and predictability from year to year.

Let us help.

Browse our BlueEdge level-funded plans and talk to one of our Small Group Account specialists to see if it’s the right plan for you and your employees. You can call us at 866-481-5783, Monday through Friday, 8 a.m. to 4:30 p.m., or email your questions to smallgroup.sales@bcbsks.com.

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