Frequently Asked Questions

It is typically a self-funded arrangement packaged around one fixed monthly payment. That payment combines a fund for expected claims, stop-loss insurance, and plan administration. The structure can feel like a fully insured premium during the year, but the group's actual claims can affect a possible surplus and the next renewal.

There is no reliable flat price. Carriers consider factors such as employee enrollment, ages, location, plan design, network, prescription coverage, and available health or claims information. Compare the complete annual exposure, stop-loss terms, fees, and renewal method, not only the first monthly payment.

Level funding usually uses self-funded mechanics, but it packages them differently. The employer pays a level monthly amount instead of paying each month's claims directly as they fluctuate. Administration and stop-loss are commonly bundled, which makes the arrangement simpler and more predictable than traditional self-funding.

They may, depending on the contract. A favorable claims balance might be paid as cash, applied as a renewal credit, shared with the carrier, or reduced by fees and late claims. Ask when the calculation happens, whether renewal is required, and exactly which amounts can be returned.

Stop-loss may reimburse eligible claims above the contract's specific or aggregate thresholds during the plan year. At renewal, however, the carrier can use the group's claims experience to change funding levels or terms. An ongoing large claim can make the next offer materially less attractive.

It can be worth quoting for groups of 10 or more employees; carrier rules vary. Stable enrollment, favorable expected claims, and a strong need for predictable monthly costs can make the comparison worthwhile, but carrier eligibility, underwriting, plan design, and tolerance for renewal risk still decide the answer.

Yes, applicable federal requirements still matter. Funding structure does not remove the ACA employer mandate. Employers averaging at least 50 full-time-equivalent employees should determine whether they are an applicable large employer and whether their offer meets the relevant affordability, minimum-value, reporting, and eligibility rules.