Health insurance costs continue to rise, making it increasingly difficult for small businesses to offer competitive benefits while managing expenses. In response, level-funded health plans are gaining traction as a cost-effective alternative to traditional fully insured options. Major carriers, including UnitedHealthcare and Anthem, have expanded their offerings in California, particularly for groups under 100 employees, making it easier for small businesses to explore self-funded solutions with built-in cost controls.

While these plans present attractive savings opportunities and flexibility, they also come with challenges—most notably, the difficulty in truly impacting claims costs when employees struggle to negotiate care or access providers in urgent situations.

Why Are Level-Funded Plans Gaining Popularity?

Level-funded plans have historically been more prevalent in Northern California, where HMO options are scarce and PPOs are significantly more expensive than in Southern California. However, with rising healthcare costs across the state, these plans are expanding their footprint and becoming a more viable option for small and mid-sized businesses looking for greater control over healthcare spending.

Here are some key reasons behind their growing appeal:

1. Cost Predictability with Potential for Refunds

Unlike traditional self-funded plans that expose employers to unpredictable claims costs, level-funded plans offer fixed monthly payments, making budgeting easier. If claims are lower than expected, businesses may receive a refund on unused claims dollars, creating a financial incentive to promote healthier employee behavior and cost-conscious care utilization.

2. Flexibility in Plan Transitions

One of the biggest concerns for small employers considering self-funding is what happens if it doesn’t work out. Traditional self-funded plans can create long-term risks, as claims history might impact future coverage options. However, level-funded plans allow small groups to return to ACA plans without their claims experience affecting their future rates, making the transition much less risky.

3. Growing Carrier Participation

Previously, level-funded plans were limited in availability, but major carriers have aggressively expanded their offerings. Anthem Blue Cross now provides level-funded options to groups as small as 25 employees, sometimes even allowing employers to keep an HMO plan or pair it with Kaiser, provided they meet participation requirements.

4. Opportunity for Customization

Unlike traditional fully insured plans, which offer limited flexibility, level-funded options allow businesses to tailor benefits to their workforce needs. This includes selecting narrow networks, incentivizing telemedicine usage, or implementing wellness programs to help lower claims costs over time.

The Challenge: Impacting Claims Costs in Real Time

While level-funded plans offer the promise of savings, their true financial benefits hinge on controlling claims costs—a challenge many small businesses struggle with due to limited employee ability to negotiate care.

Here’s why:

1. Employees Often Lack Negotiation Power in Urgent Care Situations

When employees need immediate care, they are unlikely to shop around for the lowest-cost provider. They often go to the nearest urgent care or ER without considering cost variations. Without strong navigation tools, this behavior can lead to higher claims costs that could impact the employer’s financial risk in a level-funded plan.

2. Limited Access to High-Value Providers

Although some level-funded plans steer employees toward preferred providers to help manage costs, finding in-network care can still be a challenge—especially in certain regions where provider access is limited. Employees may end up seeing out-of-network doctors, leading to unexpected higher claims that drive up costs for the employer.

3. Lack of Awareness on How to Utilize Benefits Wisely

Many employees aren’t aware of cost-saving strategies, such as utilizing telemedicine, urgent care instead of ER visits, or prescription discount programs. Without proper education and engagement, employees may not make cost-effective decisions, reducing the financial advantages of a level-funded plan.

What Can Employers Do?

For level-funded plans to be successful, employers must take a proactive role in helping employees manage healthcare costs. Here are some strategies that can help maximize savings and improve the overall effectiveness of these plans:

1. Implement Strong Employee Education Programs

Businesses should offer ongoing education to help employees understand when and how to use their benefits, including:

• Encouraging telemedicine for non-urgent care.

• Teaching employees how to compare costs for medical procedures.

• Promoting preventive care to reduce long-term claims.

2. Provide Access to Healthcare Navigation Services

Some level-funded plans include concierge services that help employees find in-network providers, compare costs, and negotiate medical bills. Employers should actively promote these resources to ensure employees utilize them effectively.

3. Align Plan Design with Cost-Containment Strategies

Employers can structure their level-funded plan to encourage cost savings, such as:

• Offering narrow network PPO options with negotiated lower rates.

• Incentivizing employees to use high-quality, lower-cost facilities for procedures.

• Implementing wellness programs that encourage preventive care and healthier lifestyles.

4. Leverage Carrier Partnerships for Better Insights

Carriers offering level-funded plans provide data insights on claims trends. Employers should work with their brokers and carriers to analyze this data and adjust strategies accordingly, such as adjusting plan design or modifying employee incentives to reduce unnecessary spending.

Is Level-Funding Right for Your Business?

While level-funded plans offer tremendous potential savings, they require active participation from employers and employees to be truly effective. They work best for businesses that are:

• Willing to educate employees on cost-saving healthcare strategies.

• Proactive in managing claims by leveraging carrier tools and analytics.

• Looking for cost predictability with the potential for refunds on unused claim dollars.

For employers struggling with rising healthcare costs, level-funded plans provide a compelling alternative to traditional fully insured options. However, success depends on implementation—a hands-off approach could lead to unexpected costs, negating the benefits.

If you’re considering a level-funded plan for your business, working with an experienced benefits consultant can help you navigate the options, optimize cost-saving strategies, and ensure the plan aligns with your company’s long-term financial and healthcare goals.

 

The Growing Need for Long-Term Care Planning

Most people don’t think about long-term care (LTC) until they or a loved one need it. By then, options are limited, and costs can be overwhelming. With Americans living longer than ever, the need for long-term care is becoming a reality for more families. Yet, most are unprepared.

Consider this:

• 7 out of 10 people over age 65 will require long-term care at some point.
• The average cost of a private room in a nursing home exceeds $100,000 per year, and home health care services can cost thousands per month.
• Medicare doesn’t cover most long-term care expenses, leaving many individuals to pay out of pocket or rely on Medicaid, which has strict asset limits.

With these staggering statistics, the question isn’t if you’ll need care—it’s whether you’ve planned for it.

The Real Costs of Long-Term Care

Long-term care isn’t just about nursing homes. It includes:

✓ Home Care – Caregivers assisting with daily activities like bathing, dressing, and meal prep.
✓ Assisted Living – Facilities providing personal care, meals, and social activities.
✓ Nursing Homes – Skilled care for individuals with serious health conditions.
✓ Memory Care – Specialized services for those with dementia or Alzheimer’s.

Who pays? Without insurance, individuals must fund their own care, which can drain retirement savings rapidly. Medicaid covers LTC but only after spending down assets.

Long-Term Care Insurance: Is It Right for You?

Long-term care insurance (LTCI) helps cover these costs and preserves financial security. However, it’s not a one-size-fits-all solution. Here are some key considerations:

• Premium Costs – LTCI premiums vary based on age, health, and coverage choices. Buying early (in your 50s or early 60s) locks in lower rates.
• Hybrid Policies – These combine life insurance or annuities with LTC benefits, allowing you to use the funds for care or leave a death benefit if unused.
• State-Sponsored Programs – Some states (like Washington and California) are exploring mandatory LTC tax programs, making private insurance even more attractive.

Long-Term Care Benefits as an Employee Perk

Why More Employers Are Offering LTCI

With the increasing costs of long-term care and a growing awareness of financial planning, employers—especially small businesses—are adding long-term care insurance to their benefits package.

• Competitive Edge – Employers offering LTCI can stand out in today’s competitive job market, helping attract and retain top talent.
• Low-Cost, High-Value Benefit – Unlike traditional health insurance, LTCI policies can be offered at little to no direct cost to employers, with employees paying premiums through payroll deductions.
• Tax Advantages – Businesses may qualify for tax incentives when offering LTCI to employees.

Small Employers Can Now Compete

Historically, long-term care insurance was seen as a benefit only for large corporations. But today, even small businesses can provide this essential coverage through group LTCI policies or voluntary enrollment plans.

• Employers can negotiate better rates and simplified underwriting, making it easier for employees to qualify.
• Coverage can be extended to spouses, parents, and even in-laws, making it an attractive family-oriented benefit.
• With state-mandated LTC programs on the rise, offering private LTC insurance may help employees avoid state-imposed payroll taxes.

For business owners, providing long-term care insurance isn’t just a perk—it’s a way to protect your employees, their families, and your company’s bottom line.

The PERFECT Long Term Care Solution

 So, imagine, if, by implementing ONE strategic product, you could eliminate one of life’s biggest uncertaines, one of life’s biggest What-IF’s?

Enter the PERFECT LTC plan – from CorpStrat. Its pretty amazing. Create a robust pool of care for either individuals, or couples. Can be funded at one-lump sum or over time. Everything about it is guaranteed!

Either one of three things can happen if you act on this:

• You get sick and use this plan, and it will PAY A MONTHLY BENEFIT to pay for care to you for as long as you (and your spouse) live.
• You quit this plan along the way, because something better comes along, like a new product or strategy is unveiled, and you recapture most (or all) of your outlay. (NOT an EXPENSE – its an ASSET!)
• You live a long healthy life and never use or need care, in which case the policy pays a large death benefit to your heirs, tax-free.

No one knows what the future holds, but having a plan ensures that you and your family have choices, dignity, and financial stability when it matters most.

Want to Learn More?

If you’re an individual looking for coverage, or a business owner exploring LTC insurance as an employee benefit, let’s talk!

In the wake of the tragic death of UnitedHealthcare CEO Brian Thompson, a seismic shift is taking place in the healthcare and insurance industries. While the circumstances are deeply regrettable, the event has acted as a catalyst, sparking widespread public discourse and demand for change. This backlash, fueled by years of frustration over denied claims and rising costs, is now opening the door for positive reforms that could reshape the future of healthcare.

Transparency and Accountability: A New Era for Insurers

The intense criticism that followed this tragedy has forced health insurers to face a long-overdue reckoning. Public outcry has highlighted opaque practices around claim denials and coverage decisions, pushing insurers to be more transparent in their operations. In response, many companies are re-evaluating their policies, promising to prioritize patient needs and rebuild trust.

Competitors like Anthem Blue Cross / Blue Shield have already felt the heat, reversing controversial policies, such as limiting anesthesia coverage during surgeries. This swift response underscores the power of consumer advocacy and the importance of accountability in an industry that impacts millions. Plus, it underscores the real complexities involved in managing fraud and abuse, and the consumers expectations of near perfection in a “amazon instant response” expectant world..

Policy Reforms on the Horizon

This public backlash has caught the attention of lawmakers and regulators, many of whom are now prioritizing healthcare reforms aimed at protecting consumers. Proposed changes include tighter regulations on claim denials, improved transparency requirements, and initiatives to curb rising premiums. These reforms, if enacted, could mark a significant step toward creating a more equitable healthcare system.

Elevating Public Awareness

For years, healthcare inequities and challenges have persisted in the shadows, experienced by individuals but rarely discussed on a national scale. Now, personal stories of denied claims and financial struggles are coming to light, creating a collective call for action. This elevated public awareness has empowered consumers to advocate for their rights, putting unprecedented pressure on insurers to improve.

A Spark for Industry Innovation

The backlash is also fueling innovation in the healthcare space. Alternative models, such as Individual Coverage Health Reimbursement Arrangements (ICHRAs), are gaining traction in some states, while MEWA’s (Multiple Employer Welfare Trusts) are breaking the traditional fully insured model and creating non-ACA compliant alternatives for small and medium sized employer. Insurtech startups continue trying to be disruptive, creating consumer-friendly solutions designed to challenge traditional insurance practices.

These trends signal that the industry is ripe for transformation. By focusing on patient-centric care, ethical decision-making, and technological advancements, the healthcare landscape could emerge stronger and more efficient than ever.

Internally, insurance companies are being forced to rethink their culture and leadership priorities. As public trust erodes, the spotlight is on executives to lead with empathy and integrity. This moment could mark the beginning of a new chapter for corporate responsibility in healthcare and across all insurance plans and companies and products.

Conclusion: Turning Crisis into Opportunity

While the events surrounding this backlash are tragic, they have ignited a movement for possible change. By addressing long-standing issues and embracing innovation, the health insurance industry has an opportunity to rebuild trust and create a system that prioritizes fairness, transparency, and patient care. This is not just a moment of reckoning—it’s a chance for transformation. The team at CorpStrat stands ready to guide and lead your team.

What do you think? Could this be the tipping point for real change in the healthcare industry? Share your thoughts in the comments.