Today's question is: What is Level Funded Premium and how can it apply to your business?
The simple answer is, it's an easy way for you to pay for your company's medical plan. It helps you stay on budget because you pay the same premium every month for the plan year. That's where the Level part of the name comes in.
This Level Funded Premium is available with self-funded type plans, also called ASO, or administrative service only, plans. This ASO option used to be available only to big corporations. But now, Humana is offering an ASO option to businesses with as few as 51 employees.
It's an option for businesses whose employees don't make a large number of health insurance claims. For many businesses, it could be a great way to lower their health insurance costs by saving on claims expenses.
With Level Funded Premium, Humana takes care of the administrative part of the plan – things like handling the paperwork for your employees' claims and paying the hospitals, doctors and specialists.
Let's look at an example that can make it easier to understand. Take our friend, Steve.
Steve used to be an executive at a large corporation. He saw first-hand how an ASO plan worked. Then, a few years ago, Steve decided to leave the corporate world to fulfill his dream of owning a chain of fitness centers. Steve worked hard and his fitness centers became a big success. Today, he has about 100 employees working for him.
Recently, Steve noticed something about his health plan. The amount of money he was paying in premiums was more than the amount of claims his employees were making. He was losing money on his company's health insurance.
So Steve's insurance broker suggested switching to a Humana plan with Level Funded Premium. The plan offered many benefits for Steve's business.
First, Steve knew his premiums would stay the same month-after-month, making his budget planning easier.
Second, he could still offer Humana's standard healthcare plans to his employees.
And third, and most important, if Steve's company's claims are less than the funded amount, he gets a rebate or a rate credit for the next year.
Or, if claims go over, Steve's protected. Humana will pay for claims over the stoploss limit.
In summary, Steve could sit back and relax knowing he finally found the right health plan for his employees. He could rest easy knowing his premiums were the same each month and Humana made it easy by administering his plan. And best of all, he could lower his healthcare costs.
Maybe it's time you called your Humana broker to ask about Level Funded Premium for your Humana health plan. It could be perfect for you, too.
So, until next time, stay smart and stay healthy.