Level Funded Plans
Put a cap on your costs with a Level Funding Health Plan
What Are Level Funded Plans?
Level-funded health plans are a hybrid between traditional fully insured insurance and self-funded insurance. Instead of paying a high, fixed premium to an insurance company no matter what happens, your business pays a set monthly amount that is designed to cover your employees’ expected medical claims, administrative costs, and built-in protection against large losses. That’s why it’s called “level funded” — your payments stay level and predictable throughout the year.
So how do level funded plans work in Utah on a month-to-month basis? Each monthly payment is broken into three parts. One portion goes into a claims fund that pays for your employees’ medical expenses as they occur. Another portion covers administration and network access, which includes things like customer service, provider networks, and claims processing through carriers such as SelectHealth, Regence, or EMI. The third portion pays for stop-loss insurance, which protects your business from unexpectedly high medical claims.
Self Insurance
A level-funded plan is a great option for some health employers but not all. Level funding differs from self-funding however in that an employer pays monthly premiums throughout the policy year.
Monthly Cash Stabilization
Level-funded health plans are a hybrid of traditional fully-insured plans and self-insured plans. With a level-funded plan, you’ll contribute a set dollar amount with the employee contributions as well.
Best Situations for Level Funded Plans
Who Qualifies for Level Funded Plans in Utah?
One of the most common questions we hear from employers is who qualifies for level funded plans in Utah, and the answer is more businesses than you might think. In most cases, level funded health plans are available to companies with 5 to 100 employees, although some Utah carriers allow groups as small as 2 employees to participate. As long as you have W-2 employees (not just 1099 contractors) and meet basic participation rules, you may be eligible.
Participation is an important requirement. Most carriers require that a certain percentage of your eligible employees enroll in the plan — typically 70% to 75%. This prevents only the employees who need healthcare from signing up while healthier workers opt out, which would drive up costs. Some flexibility may exist if your company is enrolling during an open enrollment window or if employees already have coverage through a spouse or Medicare.
There are also employer contribution rules. In Utah, most level funded plans require the business to pay at least 50% of the employee-only premium. This keeps coverage affordable for workers and ensures the plan is structured as a true employer-sponsored benefit. Employers can choose to contribute more or extend contributions to dependents, but the 50% threshold is the typical minimum for eligibility.
While many businesses qualify, level funded plans tend to work best for certain industries. Utah companies in technology, professional services, construction, healthcare, manufacturing, and office-based businesses are often ideal candidates because they tend to have stable workforces and moderate claims. Younger or healthier employee groups usually see the biggest savings and the highest chance of receiving refunds at the end of the year.
If you have a growing team and are tired of rising fully insured premiums, there’s a strong chance your business already qualifies for a level funded plan in Utah — and that it could save you significant money while still providing high-quality coverage for your employees.
FAQs About Level Funded Plans Utah
Are level funded plans cheaper in Utah?
In many cases, yes. Utah has a relatively young and healthy workforce compared to national averages, which makes level funded plans in Utah especially cost-effective. Because these plans are priced based on your group’s expected claims instead of being pooled with much larger, higher-risk populations, many Utah employers see lower monthly costs and the opportunity to get money back at the end of the year.
What size business is best for a level funded plan?
Level funded plans typically work best for businesses with 5 to 100 employees, although some Utah carriers allow groups as small as two. Companies with stable staffing and at least a handful of employees usually get the most benefit, since the risk is spread across more people and claims are easier to predict.
Do level funded plans cover pre-existing conditions?
Yes. Level funded plans are ACA-compliant, which means they must cover pre-existing conditions just like fully insured plans. Employees cannot be denied coverage or charged more because of their health history. From the employee’s perspective, the coverage works the same as any traditional group health plan.
How do refunds work?
When you enroll in a level funded plan, part of your monthly payment goes into a claims fund. If your employees use less healthcare than expected during the year, the unused money in that fund is typically returned to your business as a refund or credit after the plan year ends. This is one of the biggest advantages of level funded insurance — instead of overpaying an insurance company, you keep the savings.
Are employees aware it’s not fully insured?
Most employees never notice a difference. They use the same insurance cards, provider networks, and claims process they would with a fully insured plan. Doctors and hospitals are paid the same way, and employees receive the same coverage and protections. The financial structure behind the scenes doesn’t change the experience for them — it simply gives the employer more control and potential savings.
