The level-funding approach to employer medical stop-loss, part 1

Editor’s note: Be sure to read part two in the series. 

Are you thinking about offering a level-funded stop-loss product to employers? Or, perhaps you already have a level-funded offering that has not met your expectations for success. Designing and implementing a level-funded product is complicated and requires many considerations.

Level-funded stop-loss has been an increasingly enticing product for both employers and carriers since the passage of the ACA. Smaller employers with fully-insured medical plans are attracted to the level-funded product’s self-funded features – including lower premium taxes, more control over plan designs, the expectation of sharing in favorable experience, and the access to plan experience data which can be scrutinized for cost containment possibilities.  The percentage of covered workers in small firms (3-199 lives) with a level-funded or self-funded plan grew from 24% to 31% between 2019 and 2020.