SIDEBAR Fall 2021 - 7

MONTGOMERY B AR .O R G
A Word from USI Affinity | My Benefit Advisor
Small Groups Should
Consider Minimum Premium
Arrangements
U
ntil recently, self-funding has only been a realistic
option for larger groups. Now, however, with the
advent of " level funded " programs, small groups can
obtain the advantages of traditional self-funding with the benefit
of stable monthly costs.
Level funding is worth considering for employers with 25 or
more employees if the insured population is generally healthy.
With level funding, the employer pays a fixed monthly
cost to cover the amounts necessary for administration of the
plan, stop loss coverage and claims funding. A third-party
administrator pays the claims. Generally speaking, if at the
end of the year, claim costs come in lower than expected,
the administrator refunds the difference. If at the end of the
year, claims come in higher than expected, the employer will
reimburse the administrator for the difference.
Protection for the employer comes in the form of stop-loss
insurance. Specific stop-loss limits the employer's financial
exposure when health claims for a particular covered individual
exceed a specified dollar level, such as $25,000 or $50,000.
Aggregate stop-loss insurance limits the employer's financial
liability when the total claims incurred by their group exceed a
specified level, such as 120% or 125% of expected claims.
The Montgomery Bar Association offers its members access to
My Benefit Advisor as a solution for employee benefits, including
voluntary offerings. For more information about My Benefit
Advisor, visit our website at montba.mybenefitadvisor.com or
contact Ray Keough at (610) 684-6932.
FALL 2021 7
http://montgomerybar.org http://montba.mybenefitadvisor.com
SIDEBAR Fall 2021

Table of Contents for the Digital Edition of SIDEBAR Fall 2021
