Full Insured vs. Level Funded Health Plans

When it comes to choosing a health plan for your small business, understanding your options is key. Two common choices for small businesses in Norman, OK are fully insured and level-funded health plans. While they both provide health coverage for employees, they differ in how they’re structured, paid for, and how much financial risk you take as an employer.

Fully Insured Plans
With a fully insured plan, you pay a fixed premium to an insurance carrier. These are the plans that you are likely most familiar with. The insurer takes on all the risk and handles all claims. This option is simple and predictable, making it a popular choice for small businesses or those who want minimal financial risk and administrative responsibility.

Level-Funded Plans
Level-funded plans are a hybrid between fully insured and self-funded plans. You pay a set monthly amount that covers claims funding, stop-loss insurance, and administrative fees. If your claims are lower than expected, you may receive a refund at the end of the year. If claims are high, stop-loss insurance kicks in to protect you. These plans offer more transparency and potential savings but come with slightly more complexity and risk.

Which One is Right for You?

• Choose fully insured if you want simplicity, fixed costs, and less involvement. These plans can be great options for groups offering coverage for the first time.

• Consider level-funded if you have a healthy group, want more control over your plan, and are open to potential savings. These plans can be great options for groups who are looking for cost savings and have a healthy group of employees.

Understanding these differences helps you pick the best option for your team and your budget. Not sure which fits your business? Talk to a benefits advisor who can help guide the decision.