Level Funding:
A Simple Guide

Level funding is an innovative healthcare financing option that combines elements of self-insurance with the predictability of traditional fully insured plans. It’s designed for small to medium-sized businesses looking to gain more control over their healthcare costs without taking on excessive risk or administrative burden.

1. Fixed Monthly Payments:

• Companies pay a set amount each month, similar to a traditional insurance premium.
• This amount is calculated based on expected claims, stop-loss insurance, and administrative fees.
• Payments remain consistent throughout the year, providing budget stability.

2. Stop-Loss Insurance:

• To protect against unexpectedly high claims, stop-loss insurance is included.
• This coverage kicks in if individual or aggregate claims exceed predetermined thresholds.

3. Administrative Services:

• NARFA handles all paperwork and claim processing.
• This includes employee enrollment, claims adjudication, and all member service.

4. Network Access:

• Employees gain access to a broad network of healthcare providers with the Cigna National PPO Network.

5. Reporting and Analysis:

• Employers receive detailed reports on healthcare spending and utilization.
• This data can be used to make informed decisions about future plan designs.

1. Cost Control:

• Potential for significant savings.

2. Customization:

• Ability to tailor plan designs to meet the specific needs of your workforce.
• Flexibility to adjust coverage options and contribution strategies.

3. Transparency:

• Detailed reporting provides insight into healthcare spending patterns.
• Better understanding of what drives costs in your health plan.

4. Predictable Budgeting:

• Fixed monthly payments allow for easier financial planning.
• Protection against unexpected high claims through stop-loss insurance.

5. Reduced Administrative Burden:

• NARFA handles day-to-day plan management.
• Employers can focus on their core business rather than healthcare logistics.

6. Potential Tax Advantages:

• Consult with a tax professional for specific guidance.

1. Continuity of Care:

• Employees can typically keep their existing doctors and healthcare providers.
• No disruption to ongoing treatments or established medical relationships.

2. Broad Network Access:

• Access to a large network of healthcare providers (e.g., Cigna National PPO Network).
• Freedom to choose preferred doctors and hospitals.

3. Stable Coverage:

• From the employee’s perspective, the plan functions like traditional insurance.
• No change in how they access care or use their benefits.

4. Potential for Enhanced Benefits:

• Surplus to be used to offset future premium increases.
• Possibility of more tailored coverage options that meet specific workforce needs.