What a level-funded plan is
A level-funded plan is a self-funded plan packaged to feel like insurance. You pay the same amount each month. That payment funds a claims account, the administrator's fees and a stop-loss policy that covers claims above set limits. If claims come in low, some plans refund part of the surplus; if they run high, your renewal goes up.
They're now common: KFF's 2025 survey found 37% of covered workers at firms with 10 to 199 workers are in a level-funded plan.
The trade-offs
- Underwriting. Stop-loss carriers price your group from health questionnaires or claims. One employee with a serious diagnosis can raise your rate or get you declined. Having trained in medicine, I find it uncomfortable that a colleague's cancer diagnosis can become a pricing input for the whole company.
- Renewals follow your claims. A good year may earn a refund; a bad year raises next year's payment, right when you most need stability.
- Your team still has a deductible. Most level-funded designs look like a standard PPO or HDHP to employees.
- Several vendors. Administrator, stop-loss carrier, network and pharmacy benefit manager are often separate, each with a fee.
- State limits. New York bans stop-loss for small groups, and California sets minimum stop-loss attachment points for small employers.
Level-funded vs. Prescience
| Level-funded | Prescience | |
|---|---|---|
| Monthly cost | Fixed for the year; renewal driven by your claims | One contribution set in your quote, usually 10–20% below comparable fully insured coverage |
| Underwriting | Stop-loss policy underwritten to your group | Not underwritten to your group's health |
| Admin fees | Administrator and stop-loss fees built into the payment | $0 |
| Deductible your team sees | Usually a standard deductible | Effective $0 |
| Care support | Varies by administrator | 24/7 physician-led care navigation |
How a Prescience plan works
At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:
- An effective $0 deductible, so the plan helps from the first visit.
- Simple copays shown before a visit, capped by a low out-of-pocket maximum.
- A broad national PPO network, plus providers we contract with directly.
- 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.
What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.
See what your team would pay with Prescience
Answer a few questions about your team and get a quote in about 60 seconds, or talk it through with one of our benefits experts.
