How Level-Funded Health Insurance Can Help Startups Provide Better Care While Reducing Expenses
As a startup, it's important to find ways to provide quality healthcare coverage for your employees while also keeping costs under control. One option to consider is level-funded health insurance, which can offer a number of benefits for startups looking to provide comprehensive coverage while also reducing expenses.
What is level-funded health insurance?
Level-funded health insurance is a type of insurance that spreads the risk of healthcare expenses among a group of people, rather than having each individual bear the full cost of their own medical bills. It works by requiring the payment of a fixed amount (the "level") to cover expected healthcare costs. If the actual healthcare costs for the group exceed this amount, the insurer will cover the additional costs. If the healthcare costs are lower than the level, the excess is returned to the group.
One of the main advantages of level-funded health insurance is that it allows startups to budget more accurately for their healthcare expenses. Instead of paying a fixed premium each month, level-funded insurance allows startups to predict their healthcare expenses and budget accordingly. This can be particularly useful for startups, which often have fluctuating budgets and may not have the financial stability of larger, established companies.
Flexibility and customization
Another advantage of level-funded health insurance is that it can offer more flexibility and customization than traditional insurance plans. Startups can choose the level of coverage that best meets their needs and budget, and can also add additional benefits such as dental or vision coverage. This allows startups to tailor their healthcare coverage to the specific needs of their employees.
For example, a startup with a younger, healthier workforce may choose a lower level of coverage and fewer additional benefits in order to keep costs down. On the other hand, a startup with an older, more high-risk workforce may choose a higher level of coverage and more additional benefits to ensure that their employees have access to the healthcare they need.
Attracting and retaining top talent
In addition to the financial benefits, level-funded health insurance can also help startups attract and retain top talent. Providing quality healthcare coverage is often a key factor in employee satisfaction and loyalty, and level-funded insurance allows startups to offer a competitive benefits package without breaking the bank.
Startups often have to compete with larger, more established companies for top talent, and offering a comprehensive benefits package can help them stand out in the job market. By choosing a level-funded insurance plan, startups can offer a variety of coverage options and additional benefits that meet the needs of their employees, while still keeping costs under control.
Is level-funded health insurance right for your startup?
Of course, level-funded health insurance is not right for every startup, and it is important to carefully consider all options before making a decision. There are a number of factors to consider when choosing a healthcare plan, including the size of your workforce, the age and health status of your employees, and your budget. Some companies also choose to opt for Limited Indemnity Plans like the one offered by Fundamental Care. These plans are Fixed-indemnity medical plans designed to provide a basic to mid-level medical benefit for employees and association members who are not covered by a major medical plan.
It's also important to compare different plan designs and understand the terms and conditions of each one, including the level of coverage, copays, and any exclusions or limitations. Working with a healthcare insurance broker can help evaluate options and make an informed decision. Here at Coterie Advisory Group, working with Brokers, we provide customized Statistical Modeling Reports to help guide decision support and determine the appropriate benefit levels and the right price-points for our potential clients' product offering.
In summary, level-funded health insurance can be a valuable option for startups looking to provide quality healthcare coverage while also reducing costs. It allows startups to budget more accurately for their healthcare expenses, offers more flexibility and customization than traditional insurance plans and BUCA offerings, and can help attract and retain top talent. While it may not be the right choice for every startup, it is worth considering as part of an employee benefits package.
It's also important to note that level-funded health insurance is not the same as self-insured health insurance. With self-insured health insurance, the startup assumes the risk of healthcare expenses and pays for medical bills directly, rather than paying a fixed amount to an insurer. This can appear to be an advantageous and cost-effective option for startups with a very small or healthy workforce, but it also carries more risk and requires more administrative work which most startups are not looking to take on.
In conclusion, level-funded health insurance can be a useful option for startups looking to provide quality healthcare coverage for their employees while also reducing costs. It allows startups to budget more accurately for their healthcare expenses, offers more flexibility and customization than traditional insurance plans, and can help attract and retain top talent.
We offer Affordability Based Medical Insurance Plans
Coterie Advisory Group’s Fundamental Care® programs are Affordability-Based Medical Plans which are designed for various niche-markets, including: small business and their employees, part-time, hourly, seasonal employees at enterprise-level companies, independent contractors, gig-economy workers, and association members. Fundamental Care is designed to meet the needs of the underserved, by providing access to unique and affordable health insurance benefits on a guaranteed issue basis. Limited-Day and Limited-Benefit Indemnity plans can be customized and structured with affordable premiums and no deductibles. Coterie Advisor's can also provide Minimum Essential Coverage (MEC) and bronze-level Minimum Value Plan (MVP) options for client's needing a solution for their full-time equivalent employees. The combined offering of the Fundamental Care plans is unique to the marketplace. Through Coterie's Affordability Based Medical Plan Strategy, the plans not only provide needed healthcare to the insured employees but also offer companies a strategy to improve recruiting and reduce turnover by rewarding a carve-out class or more-tenured employees.
Fundamental Care offers two Affordability-Based Medical Insurance Options:
An employer-sponsored, level-funded, Limited-Day Health Plan for small to midsize employers and carve-out classes of large employers. Plans cost 30-40% less than HDHPs with no deductibles. A near-comprehensive plan that both employers and employees can afford.
THREE LEVELS OF PLAN
An affordable Bronze MVP plan – with no deductible
An affordable mid-range MEC plan with limited days of hospitalization– with no deductible
A Value priced outpatient expense MEC plan- with no deductible
A Limited-Benefit Indemnity Plan for large employers with part-time, hourly, and seasonal employees; and for associations and affinity groups. An affordable option for the uninsured that provides coverage for basic medical expenses.
Available with or without Minimum Essential Coverage (MEC) and Minimum Value Plans (MVP)
Both can be customized and structured with affordable premiums and no deductibles. The plans are high in potential coverage, guaranteed issue, and include upfront, day-one benefits.
Coterie Advisory Group, Inc. is a National insurance program manager and consultative advisor who delivers Affordability Based Medical Plan Strategies to help benefit brokers, consultants, employers, and associations in the benefits industry.