Level Funding (Partial Self Funding) For Groups Down to 5 Employees

Jun 4, 2018

  1. AnnaW
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    AnnaW New Member

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    We have Aetna, NGBS in my market. Humana and Allsavers are 10+. Would like some options for 5+ employee groups with stop loss carriers/TPA's to look at.

    Thanks
     
    AnnaW, Jun 4, 2018
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  2. Benefits Guy
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    Benefits Guy New Member

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    Starmark (Trustmark) claims they can go down to 5, but I'd be really apprehensive about going self-funded (ok, partially self-funded) with a group that small even if it is level funded. They're in most states, but not all. You'd have to check with them.
     
  3. leevena
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    leevena Guru

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    Would be interested in knowing why you are hesitant. At what size group would you be comfortable with level funding? Thanks
     
    leevena, Jun 27, 2018
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  4. Benefits Guy
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    Benefits Guy New Member

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    Depends on the group. But a group that size has to really convince me that they're financially stable enough and understand the commitment to going level-funded. It's really not so much the concentration of risk over so few lives as long as their contract protects them from shortages at the end of the contract period. They can always revert back to fully insured if their claims are too high. My chief concern is them dropping the plan mid-year (financial hardship, business closure, or just plain flakiness, etc.) and retroactively voiding their stop-loss, which is the way the Starmark contracts work.
     
  5. rcduggan
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    rcduggan Super Genius

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    less than 10 is not cost-effective, period.
     
    rcduggan, Oct 26, 2018
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  6. leevena
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    leevena Guru

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    Can you be a little more specific as to why you believe it is not cost effective. Are you referring to the carrier or the client? Thank you.
     
    leevena, Oct 26, 2018
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  7. floridashores
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    floridashores New Member

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    I'm confused on this. Please help me understand. Partial or Level funded has no downside. It's a hybrid. Good year, yay! Bad year, no worse off than fully insured. There's a protective ceiling. What am I missing?
     
  8. Benefits Guy
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    Benefits Guy New Member

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    You pretty much got it. I've found level funded rates to be much better than fully insured plans, plus you get the claims data. The risk is, that protective ceiling goes away with some of the level funded carriers if the client drops the plan mid contract year. So that could be a huge problem if your client encounters financial difficulties and finds that they're having trouble maintaining their health plan which is more prone to happen with smaller employers than larger, more established ones. It also creates challenges if they ever want to change their open enrollment date.
     
  9. ABC
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    ABC Guru

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    I'm crushing the level funded in under 50. My avg saving vs ACA group is around 31%.
    I've had a couple of cases where it's been 50%+ savings. Best cases are younger groups with about 20 EE with over $10K a month in premium but I've gone as low as 4 ee.
     
    ABC, Mar 12, 2019
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  10. Benefits Guy
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    Benefits Guy New Member

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    Who are you using? Starmark has been my "go to" carrier so far. They have their pro's and con's, but I've found them easy to work with.
     
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