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A top UnitedHealthcare executive is seeing a sign of stability in the U.S. health benefits market: Employers are only somewhat more interested in shifting to level-funded plans now than they were a year ago.
Derek Springer, the chief executive officer of level-funded at UnitedHealth's UnitedHealthcare unit, talked about the current state of the U.S. level-funded market Wednesday, in an interview.
UnitedHealthcare helps employers set up and administer about 50,000 level-funded plans. The company expects to make half of its level-funded plan sales for 2026 during a period that started in October and will end in January.
For employers facing huge increases in premiums for fully insured coverage, the level-funded plan market is a refuge: Offering a level-funded plan is usually cheaper, especially for employers with relatively healthy employees.
So far, employers have not been rushing in to replace fully insured plans with level-funded plans, Springer said.
The fall "is always a busy time of year," Springer said. "This is a little bit busier."
The typical employers that are considering level-funded plans were facing increases in 2026 health coverage cost increases ranging from the high single digits to the mid teens, Springer said.
That compares with an increase in the high single digits in an average year, he said.
The increases "are some of the most elevated I've seen in a single year," Springer said.
But he noted that, as bad as the increases have been, they're not the worst he's ever seen.
Level-funded plan basics: An employer with a level-funded plan sets up a self-insured plan and uses stop-loss insurance to protect the plan against big claims. The employer makes a fixed monthly payment to cover the cost of the claims, the stop-loss insurance and administrative expenses.
In years when claims are low, the employer may get cash back.
Level-funded plan numbers: The United States has 2 million establishments with 10 to 199 employees. Those establishments have about 70 million employees.
KFF estimates that 73% of the employers in that size range offer health benefits, and that 37% of those employers — 27% of the total — use level-funded plans.
The figures imply that employers are using 500,000 level-funded plans to cover 17 million employees.
UnitedHealthcare's level-funded plan program: At UnitedHealthcare, level-funded plans are most popular with employers with fewer than 100 employees, used by some employers with 100 to 500 employees, and used occasionally by larger employers.
The characteristics of the employers that choose to use level-funded plans tend to be similar to those of other employers of the same size in the same state, Springer said.
When the employers that shift to level-funded plan designs want to try new ideas, they tend to focus on providing free virtual care services and using a UnitedHealthcare program that gives patients detailed cost and coverage information before they see a provider.
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