WFI Healthcare AgencyLevel-funded & self-funded
Level-Funded Group Plans
Level-funding replaces a fixed insurance premium with a fixed monthly claims budget — priced off your own group’s risk instead of a community rate, with stop-loss insurance capping the downside. If your group has a healthy year, the leftover comes back to you.
Not available everywhere — check here first
Before comparing costs, confirm your state even permits this for a group your size.
Permitted for small groups. State law sets a floor of $20,000 per covered person, though carriers typically write $40,000 or more.
New York bars insurers from issuing new stop-loss policies to small groups — and since 2016 New York has defined a small group as 1–100 employees. Only policies issued and in effect on or before January 1, 2015 to groups of 51–100 may still renew, effectively closing this path for most New York employers under 100.
No minimum attachment point for small-group stop-loss, so level-funded arrangements are open to small groups here. Georgia’s stop-loss requirements sit in its multiple-employer (MEWA) rules, which do not govern a single employer’s level-funded plan.
Where the money actually goes
One fixed monthly payment, split three ways.
Claims fund
Covers expected medical costs based on your group’s census.
Stop-loss premium
Insurance that caps your exposure if claims run high.
TPA admin fee
Pays the third-party administrator handling claims and paperwork.
At year-end
Claims came in low
Unused claims-fund dollars are typically refunded to you.
Claims came in high
Stop-loss covers the excess — you don’t owe more than your fixed payment.
Three funding models, side by side
Level-funding is deliberately positioned between the other two.
| Category | Fully insured | Level-funded | Self-funded |
|---|---|---|---|
| Who bears claims risk | Carrier | Employer, capped by stop-loss | Employer, capped by stop-loss |
| Monthly cost | Fixed premium | Fixed payment | Variable, tied to actual claims |
| Pricing basis | Community rating | Your group's own risk | Your group's own risk |
| Year-end refund possible | No | Yes | Yes, as retained surplus |
| Best fit | Any size, predictable budgeting | Small-to-mid groups, healthy workforce | Larger groups with cash flow flexibility |
Where the risk actually sits
Real considerations before switching. Level-funding tends to work best for groups with a relatively young, healthy workforce — a group with major ongoing conditions may not see savings materialize. As the plan sponsor, your business becomes an ERISA fiduciary with real compliance obligations. And if a bad claims year pushes costs above projections, most carriers don’t require repayment, but expect renewal rates to rise the following year.