Level-Funded Health Plans

Level-Funded Health Plans for Small Businesses in Texas

A fixed monthly cost, protection from large claims, and money back when claims run low.

Stonebridge Partners HR sets up level-funded health plans for small businesses in The Woodlands, Houston and across Texas. A level-funded plan gives employers with as few as 5 enrolled employees a fixed monthly cost, stop-loss protection against large claims, and the chance to get money back when claims come in lower than expected. We quote level-funded plans from BCBS, UnitedHealthcare, Aetna, Cigna, Allstate, Sana Benefits, Angle Health and Arlo side by side with fully insured options, so you can compare real numbers before you decide.

Get a Level-Funded Quote

At a glance

  • Minimum group size: 5 enrolled employees
  • One fixed monthly payment
  • Stop-loss insurance caps large claims
  • Possible refund of unused claims money
  • 8 carriers compared side by side
  • Local support in The Woodlands, TX

How a level-funded health plan works

A level-funded plan is a form of self-funding designed for small employers. Instead of paying a fully insured premium to a carrier, you pay one fixed amount each month. That payment is split three ways:

  • Administration: the carrier or administrator processes claims, runs the provider network and handles member service.
  • Stop-loss insurance: coverage that pays when one person’s claims, or the group’s total claims, go above set limits. This is what keeps your cost fixed.
  • Claims fund: money set aside to pay your employees’ expected medical and pharmacy claims.

Employees use the plan like any other health insurance, with ID cards, a provider network, copays and deductibles. At the end of the plan year, if claims came in below the claims fund, part of the surplus may be returned to you or credited toward the next year, depending on the carrier’s contract. If claims ran higher, stop-loss covers the difference and your monthly payment for that year does not change.

Level-funded vs. fully insured

Under ACA small-group rules, fully insured premiums are based on age, location and tobacco use, not on your group’s health. A healthy team pays about the same as a less healthy one with similar ages, and the carrier keeps whatever it doesn’t spend on claims. Level-funded plans are priced on your own group, which often lowers the cost for healthier teams.

  • Monthly cost: fixed with both.
  • Unused claims money: a fully insured carrier keeps it; with level funding, part of it may come back to you.
  • How rates are set: fully insured uses ACA rating factors; level-funded is underwritten on your group.
  • Reporting: level-funded plans typically give you claims reporting, so you can see what drives your costs.
  • Switching back: if level funding stops making sense, you can move to a fully insured plan at renewal.

Who a level-funded plan fits

Level funding tends to work best for:

  • Companies with at least 5 enrolled employees, our typical minimum.
  • Groups that are relatively healthy or younger than average and are paying ACA-rated premiums today.
  • Owners who want a predictable monthly cost but don’t want to keep paying for claims their team never makes.
  • Businesses with steady headcount that expect to keep the plan for more than a year.

It may not be the best fit if your headcount swings sharply, or if underwriting would price in large expected claims. In those cases a fully insured plan can be the better deal, and we’ll tell you so.

What drives the cost

  • Number of enrolled employees and dependents
  • Ages of the group
  • Health questionnaire results at underwriting
  • Plan design: deductibles, copays and out-of-pocket maximums
  • Stop-loss limits set by the carrier
  • Provider network and location

Clients switching from fully insured plans have saved anywhere from hundreds to thousands of dollars a year. The only way to know your number is to quote it, which takes a simple employee census and short health questionnaires.

Risks and tradeoffs to know

  • Underwriting: employees usually complete a short health questionnaire, and your quote depends on the results.
  • Renewals: a year with high claims can mean a larger increase at renewal, and a carrier can decline to renew. You can move to a fully insured plan at that point.
  • Refunds vary: how much of any unused claims money comes back, and when, depends on the carrier’s contract.
  • Run-out claims: carriers handle claims incurred before a plan ends but paid afterward in different ways, so we review that term with you before you sign.

How Stonebridge sets up your plan

  1. Discovery call: we learn your headcount, current plan, renewal date and budget.
  2. Census and questionnaires: we collect a basic employee census and help your team complete health questionnaires.
  3. Side-by-side quotes: we compare level-funded options from BCBS (Blue Cross Blue Shield), UnitedHealthcare, Aetna, Cigna, Allstate, Sana Benefits, Angle Health and Arlo against fully insured plans.
  4. Plan design and enrollment: we help you set deductibles and employer contributions, then enroll your team, adding dental, vision, life and 401(k) if you want them.
  5. Payroll on Rippling: when your payroll runs on Rippling, benefit deductions flow into payroll automatically.
  6. Ongoing support: one local contact for employee questions and claims issues, plus a yearly review of whether level funding still makes sense.

Carriers we work with

Stonebridge Partners HR quotes level-funded and fully insured health plans from BCBS (Blue Cross Blue Shield), UnitedHealthcare, Aetna, Cigna, Allstate, Sana Benefits, Angle Health and Arlo.

Level-Funded Health Plan FAQ

What is the minimum group size for a level-funded plan?
We typically require at least 5 enrolled employees.

Can a company with fewer than 10 employees get a level-funded plan?
Yes. Our typical minimum is 5 enrolled employees, and final approval depends on the carrier’s underwriting.

How much can a small business save?
Clients switching from fully insured plans have saved anywhere from hundreds to thousands of dollars a year, depending on group size, health and plan design.

What happens if our claims are high?
Stop-loss insurance pays claims above the plan’s limits, so your monthly cost for the plan year stays the same. High claims can affect your rate at renewal.

Do we get money back if claims are low?
Many level-funded contracts return part of the unused claims fund or credit it toward the next year. The terms vary by carrier, and we walk you through them before you choose.

Will employees notice a difference?
Usually not. They get ID cards, a provider network, copays and deductibles like any other health plan.

Can we switch back to a fully insured plan?
Yes. You can move to a fully insured small-group plan at renewal.

Which carriers do you work with?
BCBS (Blue Cross Blue Shield), UnitedHealthcare, Aetna, Cigna, Allstate, Sana Benefits, Angle Health and Arlo.

See what a level-funded plan would cost your team

Book a discovery call or call 832-384-5276. We’ll quote level-funded and fully insured options side by side so you can compare real numbers.

Book a Discovery Call