An essential factor for job seekers when choosing an employer is what's included in the benefits package, including health insurance in Missouri. The two primary plans for health insurance in Missouri are fully-insured and self-insured. The more traditional employer-sponsored plan is fully-insured, which is where the company pays a premium to the insurance carrier, who then collects it and pays the claims covered in the insurance policy. Based on the number of employees that are enrolled, the premium rates are fixed for a year, and then the monthly premium only changes if the number of employees enrolled change. What is a level-funded health group plan?
On the other hand, self-insured health plans are operated by the employer instead of health insurance companies in Missouri. With this plan, the employer assumes most of the risk, whereas in a fully-insured plan the risk falls on the insurance company. In short, the business is their own insurer. Self-insured plans are beneficial in that employers have more control over what is spent and the included benefits. However, all medical claims and fees are paid for through the companies own assets.
While these two options are great for larger companies, small businesses, which typically don’t have the necessary funds, turn towards level-funded health plans.
A level-funded plan is necessarily a blend of self- and fully-insured plans. It saves money and is customizable like self-funding, yet financially safe and predictable like fully-funded plans. Level-funded is comprised of three elements: claims allowance, administrative fee, and premium for stop-loss coverage. This plan is more cost effective for employers to provide health benefits to their employees, possibly saving up to 30 percent on costs. However, this is only possible if claim costs stay low. During the year as claims come in, the insurance carrier pays them from the claims allowance. The stop-loss coverage is applied if a substantial claim is made unexpectedly. At the end of the year, an evaluation is made on whether or not claim allowance can be refunded back to the employer. This is only possible if claim costs stay low. If stop-loss is used to protect the employer, the cost-per-employee will surpass the original premium given. Just a small company with healthy employees should consider level-funding health insurance in Missouri.
Insurance is a very complex industry to understand for most, which is why if you're a small business owner and looking to move away from a fully-funded plan, you should talk to health insurance companies in Missouri to discuss other options, like a level-funded plan. Here at Apollo Insurance Group, we not only offer affordable health insurance in Missouri but are expert advisors on the health insurance industry. If you are considering switching to a level-funded health plan, you can contact us today to receive a health insurance quote in Missouri for more information.