Level funding plans offer all of the benefits of traditional employer self-funding with the added benefit of stable monthly costs so groups can reap the financial rewards of being self-insured. SurgeryShopper helps you cost contain surgery claims to keep specific and aggregate stop-loss claim levels in check.
Level funding allows employer group benefit plans to mitigate risks associated with the transition to self-funding with predictable monthly claim funding and protections to limit liability. In many plans, there are features that include rebates if claims paid by the insurer total less than the amount paid by the employer, the insurers rebate the overpayment.
With level funding, the employer pays a fixed monthly amount to cover the costs of administration, stop-loss and claims funding. The insurers use the money as needed to pay claims. At the end of the year, if claims paid by insurers are less than the funds paid by the employer, the insurers rebate the employer for the overage. If claims paid by insurers exceed the monthly amount funded by the employer, the insurers will pay the claims as incurred and the employer will reimburse the advanced funds at the end of the year.
How do employers benefit from combining level funding with SurgeryShopper?
SurgeryShopper can help employers and plan participants contain costs by identifying and utilizing providers (surgeons, anesthesiologists, and facilities) who bundled and discount claims in exchange for accelerated payment via ACH or wire transfer. They encourage or incentivize utilization of these providers by designating the providers in the employers’ virtual proprietary provider network™ for surgeries that may cost tens of thousands more per procedure through the insurers’ provider network and negotiated fee schedules.
If a participant is lasered in subsequent years, SurgeryShopper’s value to the employer increases because the employer may be financially at risk for 100% of that plan participant’s claims going forward. In that case, SurgeryShopper delivers high quality surgical services by accredited facilities and vetted surgeons and anesthesiologists in inspected locations at a significantly lower price than their in-network competitors, even after travel expenses are accounted for.
Specific Stop Loss Advantages
By having a specific stop loss insurance for each plan participant, the employer’s financial exposure is limited for health claims for a specific individual that exceed a specific dollar limit within a plan year. For example, if an employer has specific stop-loss insurance of $40,000 and an individual incurs $100,000 in claims within one plan year, the employer would only be responsible for $40,000 of these claims. The stop-loss insurer would cover the remaining $60,000. But with SurgeryShopper, there’s a far greater likelihood that the specific dollar claim amount isn’t as easily incurred due to the significant savings offered by providers in exchange for same day payment and guaranteed payment when pre-authorization is given by the employer.
Aggregate Stop Loss Advantages
Aggregate stop-loss insurance limits the total claim dollar financial risk exposure of the group. It is calculated on a percentage of actuarially-anticipated claims using predictive modeling. The typical aggregate stop-loss limits for employers are in the range of 120% to 125%. Aggregate stop-loss sets a maximum claim dollar exposure that an employer will have to pay. For example, if projected claims for medical and surgery and pharmacy are estimated to be $500,000 and the group purchases aggregate stop-loss at 125%, the group’s aggregate attachment point would be $625,000.
What size groups use these plans?
Typically, the group size is 25 employees or more. The arrangement works out better for many groups where all employees have a culture of wellness and are essentially in good health.
While SurgeryShopper does not sell or act as an agency of level funded health benefit plans, we can connect you to brokers and general agents with whom we work who can discuss level funding options with you and provide additional information.
