Before You Renew, Consider a Level Funded Health Plan

Posted by Brian Honan on October 29, 2026 in Human Resources

For employers with January health plan renewals, the work is already underway. Budgets are being built, renewal proposals are arriving, and decisions about employee coverage are taking shape. Before those decisions are finalized, it is worth asking whether the alternatives include a different way to fund your health plan. Level funding is one option that deserves consideration for some small and midsize employers. Understanding how it works can help you evaluate whether your renewal recommendation reflects the choices available to your business. How Level Funding Works With a traditional fully insured plan, an employer pays premiums to an insurance carrier, which assumes responsibility for covered claims. A level-funded arrangement is a form of self-funding that packages claims funding, administrative services, and stop-loss insurance into a predictable monthly payment. The claims portion pays for covered medical expenses. Administrative fees support services such as claims processing. Stop-loss insurance protects the employer...