Who carries the risk — the carrier or you?
Every group plan is funded in one of two ways. Fully-insured means you pay a fixed premium and the carrier takes on the claims risk. Self-funded means the business pays claims directly (with stop-loss protection), keeping any savings when claims are low.
Fully-insured is simple and predictable — the traditional choice for most small groups. Self-funding can save money for healthier groups that use less care, since you keep what you don’t spend, but it carries more risk and administration. Level-funded plans (next) make a self-funded approach practical for small employers.
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Not anymore. Level-funded plans bring self-funding’s potential savings to small groups by bundling a fixed monthly payment with stop-loss protection, capping your risk while letting you share in savings if claims are low.