Businesses that want to provide high-quality health plans to their employees while minimizing their costs and maintaining financial predictability should consider level-funded health plans. Level Funding℠ from Cigna is a self-funded plan that allows companies with fewer than 250 employees to improve the health of their workforces and save money when claim costs go down.
With level-funded plans, employers pay fixed costs every month, receive refunds when claims are lower than expected, and can tailor their plan design to fit the needs of their business. Other benefits, like stop-loss insurance and detailed claims reporting, make Cigna’s level-funded health plans an ideal choice for small businesses that want to build cost-effective, comprehensive employee benefits packages.
Here’s a closer look at how Cigna level-funded plans work.
What is a Level Funded Health Plan?
Level-funding is a type of self-funding that allows businesses to enjoy the cost-effective benefits of self-funded plans with the predictability of fully-funded plans.
Employers pay a fixed monthly amount into a claims fund, and this fund is used to cover claims made by employees. With level-funded plans, employers also pay for stop-loss insurance. Stop-loss insurance provides financial protection in the event that an employee makes a sizable claim that would otherwise deplete the claims fund and prevent the employer from paying out other claims.
With level-funded health plans, stop-loss insurance premiums may go up at the end of the year if total claim costs are more than originally expected. However, if claim costs are lower than expected, employers will typically receive a refund for the additional funds they contributed to the claims fund. This refund often comes in the form of plan credits.
What’s The Difference Between Level-Funding and Self-Funding?
While level-funding is a type of self-funding, there are a few key differences between these health plan funding methods.
Level-funded plans require employers to make fixed monthly payments towards their claims funds, and if claim costs are lower than expected, they receive a refund. This allows employers to maintain financial predictability while only paying for what they use.
With self-funded plans, employers pay as they go. This allows employers to keep costs low by only paying for claims as they arise; however, these plans can make financial planning more difficult as health costs vary from month to month.
Cigna Level Funded Plans
Cigna’s Level Funding program is a self-funding solution for businesses with fewer than 350 employees.
With Cigna level-funded health plans, employers benefit from predictable monthly expenses, no additional expenses after termination, comprehensive claim reports, tailored plan designs, and credits for claim funds that go unused.
Cigna eases administrative burdens by paying all claims and deciding all appeals on behalf of employers, and services like specialty case management, utilization management, and disease management programs help individuals with chronic or acute conditions manage their conditions while lowering costs.
Employers work with a health improvement strategy team to create programs that work best for the business and its employees, and Cigna staff members are readily available to help employers with administrative issues.
Advantages of Cigna Level Funding
Cigna Level Funding health plans offer a variety of unique benefits that make them an attractive option for small businesses looking to cut costs while providing high-quality healthcare to their employees.
- Employers pay a fixed monthly amount, making it easy to plan for healthcare spending.
- Stop-loss insurance protects businesses from paying out excessively high claims.
- Policyholders have access to monthly claims reporting that tracks exactly how claim funds are spent.
- Policyholders can receive credits as refunds when they renew if their claim costs are lower than expected.
- Cigna handles claim processing and appeals, easing administrative burdens for small businesses.
- Plan details and programs are customizable, allowing employers to meet the specific needs of their employees.
- Employers can offer the same benefits to employees across multiple states.
Cigna’s level-funded health plans offer flexible, cost-effective solutions for small businesses that want to minimize their costs and maintain financial predictability.
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Level Funding by Cigna offers fixed monthly costs, customizable programs, savings opportunities, and other great benefits to companies with fewer than 250 employees. For businesses that need to minimize healthcare costs but don’t want to sacrifice coverage quality, level-funded health plans are an excellent option.
At KSA Insurance, we partner with many major insurance carriers to help small business owners in South Carolina and across the southeastern United States find the right health insurance solution for them.
Contact us today to get a quote and learn more about Cigna level-funded health plans.