Frequently Asked Questions
Questions?
Find answers to our most frequently asked questions.
Level-funded health benefits are a cost-effective alternative to traditional health insurance. You, the employer, own and control your health benefits for your employees. By controlling the plan, you can see significant savings over traditional health insurance.
Level-funded health benefits also allow you to retain your claims funds as a company asset, offering your company the opportunity for increased financial security and growth.
Level-funded works by you, the employer, obtaining an excess stop-loss policy to help protect against eligible claims above the predetermined claims cost you are willing to fund out-of-pocket. You select which plans to offer your employees, and the benefits you choose work just like traditional insurance with a PPO network – prescription copays, max out-of-pocket expenses, etc. The only difference is YOU own the plan, not the insurance company.
You can receive significant savings with level-funded. In traditional insurance, if you didn’t use as much in claims as you paid out, the insurance carrier makes a profit.
Level-funded allows you to own the plan. So, if the plan experiences lower claims costs than what you have funded, the plan sees significant savings that otherwise would be profit for the insurance carrier. Simply put, it’s your money, and you have the right to keep it.
Level-funded health benefits from United Advantage Agency allows you to pre-fund the amount of claims you are willing to pay out-of-pocket. This means that you are paying the same amount each month for each employee for your health benefits – unlike traditional plans where the monthly amount can change based on your claims.
United Advantage Agency has aligned with PHCS to utilize their nationwide provider and Ancillary network to provide you with services and access to doctors across the United States. With the PPO network, you save money on medical costs due to a pre-negotiated discount with service providers for being part of the network.
There is always a risk when owning your own benefits program, but with United Advantage Agency, we limit your exposure to risk by helping you purchase an Excess Stop-Loss Policy and aligning you with a third-party administrator to assist in keeping you compliant as well as provide administration of your health benefits plan.
There are only positives with our program! Level-funded health benefits “act the same” as fully-insured products. We contracted with PHCS to bring you a large physician network that is available across the entire United States.
UAA entered the level-funded market because we saw a need – employers were struggling to offer affordable healthcare coverage for their workforce. We joined forces with the best and brightest minds in the industry, and our team today offers 75 years of combined industry experience in every facet of healthcare—from working with major carriers to owning carriers themselves.
UAA has remained at the forefront of the level-funded marketplace, developing advanced technology that is changing the face of the level-funded benefits industry and working with some of the most prestigious partners in the country.
Yes: with level-funded, we can write groups as small as 10 employees.
Level-funded is a great fit for most companies wanting to curb premium increases that continue to come each year and who want to control their own health benefits plans.
Absolutely! When a company has a healthier workforce due to wellness programs and healthy choices, claims should be reduced. If a company sees a reduction in claims costs, more money is left in the claims fund to be retained at the end of the program term. Also, if an employee decides to go to a family practitioner for a cold versus the emergency room, the entire benefits program will profit because of the lower claims cost.
Glossary of Self-Funded Benefits Terms
Aggregate Attachment Point: The aggregate “deductible” or maximum employer expense that sets the point above which the stop loss insurance company begins reimbursing the employer. Aggregate attachment points are calculated by multiplying for each month, the single census times the single aggregate factor, plus the family census, times the family aggregate factor.
Aggregate Stop Loss: Insurance coverage to self-funded employers that provides a ceiling on the dollar amount of eligible expenses that an employer would pay, in total, during a contract period. Coverage is written on a paid claim basis, one year at a time. The carrier reimburses the employer after the end of the contract period for Aggregate claims.
ASO (Administrative Services Only): An ASO plan is a contract with an insurer to provide a fully self-insured employer with certain administrative services only; no insurance protection is provided.
Attachment Point: Same as Annual Aggregate Deductible. That point above which the liability of the stop loss carrier is attached.
Benefit Booklet: A booklet for the employee that contains a general explanation of benefits and related provisions of the health plan.
Employee Retirement Income Security Act of 1974 (ERISA): This federal legislation allows for and sets guidelines regarding a group’s ability to self-fund their benefits.
Expected Paid Claims: An estimate of the dollar value of claims to be paid during a plan year or contract period.
Exposure: The state of being exposed to the chance of loss (risk). The extent of exposure as measured by participation, proportion of female or male lives in a group, amounts or units of insurance at risk, etc.
Fiduciary:
- Indicates the relationship of trust and confidence where one person (the fiduciary) holds or controls property for the benefit of another person. For example, the relationship between a trustee and the beneficiaries of the trust.
- Under ERISA any person who (a) exercises any discretionary authority or control over the management of a plan or the management or disposition of its assets, (b) renders investment advice for a fee with respect to the funds or property of a plan, or has the authority or responsibility in the administration of a plan.
- One who acts in a capacity of trust and who is therefore accountable for whatever actions may be construed by the courts as breaching that trust. Under ERISA, fiduciaries must discharge their duties solely in the interest of the participants and beneficiaries of an employee benefit plan. In addition a fiduciary must act exclusively for the purpose of providing benefits to participants and beneficiaries in defraying reasonable expenses of the plan.
IBNR: Incurred but not reported. Claims that have been incurred but have not been reported to the administrator as of some specific date.
Incurred Claims: Those claims (paid or unpaid) for which a liability (the insurer’s) has arisen under provisions of an insurance contract.
Lag: The usual delay between the actual occurrence of a claim and its payment. Made up of both incurred but unreported claims, as well as reported but not yet paid claims. A function of benefit design, geographic location and administrative efficiency as well as human procrastination.
Mandated Benefits: A specific coverage that an insurer or plan sponsor is required to offer by law. Mandated benefits in insurance contracts vary from state to state according to each state’s insurance laws.
Paid Claims: The dollar value of all claims paid, i.e., hospital, medical, surgical, etc., during the plan year, regardless of the date that the services were performed.
Plan Document: Explains the provisions of a plan, usually including the benefits provided by the plan and the rights of those who are covered under the plan.
Plan Participant: An employee or dependent covered by the health plan.
Plan Sponsor:
- The employer, in the case of an employee benefit plan maintained by a single employer.
- The employee organization, in the case of a plan maintained by an employee organization.
- The association, committee, joint board of trustees or other similar group of representatives of the parties involved, in the case of a plan maintained by one or more employers, and one or more employee organizations.
Policyholder: The employer, trust or other entity with which the insurance company has a contract to provide insurance coverage.
Specific Stop Loss: The form of excess risk coverage that provides protection for the employer against a high claim on any one individual. This is protection against abnormal severity of a single claim rather than abnormal frequency of claims in total. Specific Stop Loss is also known as Individual Stop Loss.
Stop Loss Carrier: The insurance company that provides specific and aggregate protection for the Plan Sponsor. This carrier can be changed without disrupting to the health plan.
Stop Loss Insurance: Contract established between a self-insured group and insurance carrier providing carrier coverage if claims exceed specified dollar amount over a set period of time.
Summary Plan Description (SPD): The written statement of a plan required by ERISA. It must be provided in an easy-to-read form, including a statement of eligibility, coverage, employee rights and appeal procedure.
Third Party Administrator (TPA): The party to an employee benefit plan that may collect premiums, pay claims and/or provides administrative services. Usually an out-of-house professional firm providing administrative services for employee benefit plans.