Is level-funded premium health insurance right for your small business?

The Business Journals | October 25, 2019

Small businesses seeking to manage health insurance costs -- for themselves, their businesses and their employees – are considering a funding strategy known as level funded premiums, or LFP. LFP is a self-funding solution that pairs with most standard medical plans. Here we take a look at how LFP works and when it may be worth considering. With LFP employers have regular and predictable health plan costs while only paying for the healthcare costs actually incurred by employees. Employers pay a “level" (or fixed) amount of money each month to a third-party health services company (often an insurance carrier) to cover both administrative and anticipated employee claim costs. At the end of a year, if an employer's total payments are greater than the actual claim costs, the surplus will be refunded. However, if employee claims exceed what’s been paid, embedded “stop loss” insurance covers the difference.

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XCover is our award-winning distribution platform that enables the world’s largest digital companies to offer protection to their global customers through a single API. XCover makes it simple and stress-free for customers with around-the-clock support, automation technology and instant payments of approved claims delivering customer satisfaction and reducing support loads.

Spotlight

XCover is our award-winning distribution platform that enables the world’s largest digital companies to offer protection to their global customers through a single API. XCover makes it simple and stress-free for customers with around-the-clock support, automation technology and instant payments of approved claims delivering customer satisfaction and reducing support loads.

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