Health care is typically one of the largest expenses for employers, but an increasing number of organizations are finding a way to reduce costs while also maintaining or improving coverage.
More employers are seeking to maximize the value of their health benefits through a level-funded plan — an option that moves away from a fully insured health care plan but doesn’t come with all the financial uncertainty of traditional self-funding.
Compared to fully insured options, level-funded plans are designed to offer two main upsides: predictability and savings, including through a possible surplus refund. Employers pay a fixed monthly cost to cover claims, administrative fees and stop-loss insurance, which can help protect against unexpectedly large claims. If claims are lower than expected, the employer can keep some of the savings at the end of the year.
Generally, employers with relatively younger and healthier workforces may be able to save the most with a level-funded plan.1 Employers with level-funded plans from UnitedHealthcare paid on average 18% less than for comparable fully insured plans.2
Here are five strategies to consider when navigating the transition from a fully insured to a level-funded plan:
- Request an underwriting analysis – Consider requesting an underwriting analysis to review your company’s previous medical claims and other relevant factors to determine if a level-funded plan may make savings possible for your organization. The analysis can be coordinated by an insurance broker or by connecting directly with a health insurance company that offers level-funded plans.
- Invest in virtual care options – Virtual care, also known as telehealth, may offer employees a more convenient and affordable way to access medical services — and for more than just urgent care. Some level-funded plans offer additional ways to use virtual services, including primary care, chronic condition management and behavioral health support.
- Consider wearables for wellness – With a level-funded plan, it may become more important to help employees and their families play an active role in their health. A wellness program supported by a wearable device can equip employees with a smartwatch or activity tracker, enabling them to earn financial incentives for meeting certain daily targets — which may be used to help pay cost sharing for certain health care expenses.
- Integrate additional benefits – Research increasingly shows oral, eye and hearing health may be linked to overall health. Dental, vision and hearing checkups can reveal early signals of potential medical issues, as well as assist in the recommended management of some chronic conditions, such as diabetes. Employers moving to a level-fund plan should consider maintaining or adding coverage for dental, vision and hearing services. In fact, companies that combine medical coverage and specialty benefits may be able to help reduce costs, in some cases up to 4% on medical premiums.3
- Dial into the data – Unlike most fully insured plans, employers with a level-funded plan may receive detailed monthly data reports that can be used to help understand how employees are using their health benefits. This can enable tailored clinical interventions and communication campaigns designed to help reduce suboptimal outcomes such as avoidable emergency department visits or the use of out-of-network care providers and facilities.
Besides containing costs, a level-funded plan may help contribute to an organization’s overall culture of well-being, including by:
- Encouraging a healthier workforce
- Reducing sick-at-work productivity issues
- Reducing absenteeism
For more information about level-funded plans from UnitedHealthcare, visit uhc.com.