When you have a small company, you may wonder how to go about offering group health insurance that makes sense for your budget and for your employees. You’ll hear plenty of terms that you might not be familiar with, such as self-funded, level-funded, and fully insured. For you to be able to make the right decision for your company, it is important to understand terms such as these. The broker you choose for group health insurance can match you to the right type of program specific to your company’s situation, but here is a general idea of what self-funded, level-funded, and fully insured group health insurance is.
- Self-Funded– With this type of group health insurance, governed by ERISA, you are funding the plan by yourself completely. That means you are the one paying for claims, but only for your employees. It is wise to have a stop-loss insurance plan in place to cover a situation when claims exceed what you anticipated and could cover. This option has the most risk.
- Level-Funded– This type of plan is a combination of fully insured and self-funded. They offer a fixed and predetermined premium per employee. Tax benefits are an attractive feature of this type of group health insurance. This option has moderate risk.
- Fully Insured– With this type of plan, the insurance company is responsible for all claims. This means that your company has no risk whatsoever. Premiums can be more affordable, as well, because the risk is spread over many companies instead of just yours.
If you would like more information about group health insurance and assistance in obtaining the best coverage for your company and its employees, reach out to us at Elite Benefits Group in Monroe, North Carolina. With medical costs soaring, protecting your employees will go a long way to boosting morale, as well as retaining and attracting the best of the best.