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How do employers with fully-insured health plans receive greater monetary credit for historically positive claim experience?

Employers with good long-term health plan claim experience have plan options available to them that other employers, with historically poor claims experience, do not have access to.

Over the past few years, the markets have developed both Level Funding and Stacked Plans to appeal to those employers with historically positive claim experience.

Level funding and Reference Based Pricing (RBP) plans offer small employers the ability to be medically underwritten with the carrier’s plans priced upon the general health of the employee population. These plans, like fully-insured health plans, offer the employer the security of a set predetermined monthly premium. Level funding and RBP plans further reward the employer with the ability to receive a return of paid premiums, provided the group’s paid claim experience falls below a predetermined threshold.

The stacked plan combines the tax-free benefits of a Health Savings Account (HSA) with an employer funded “pay-as-you-go” Health Reimbursement Arrangement (HRA).

A stacked plan design example may look like:

Employers can be modified the plan’s deductible and out of pocket parameters.  The stacked plan reduces the employer premium due to moving to a high deductible plan. Premium savings can be used to fund the HRA should claims exceed the employee deductible.