And you may not need to switch insurance companies to take advantage.
By Marty Levy, CLU, RHU | CorpStrat Insurance & Employee Benefits
If you run a small or mid-sized business in California, you already know the annual ritual: your group health insurance renewal comes in, the premium increase makes your stomach drop, and you scramble to figure out what to cut — richer benefits, fewer employees covered, or just take the hit to your budget.
There’s a newer option that more California employers are turning to, and it’s worth understanding: level funded health plans. Major carriers including Anthem Blue Cross and UnitedHealthcare now offer these plans — and here’s the part most employers don’t realize — you may be able to access one without leaving your current insurance company.
So, What Exactly Is a Level Funded Plan?
Think of it as a smarter middle ground between two traditional options most employers already know:
- Fully insured plans — you pay a fixed monthly premium no matter what. Simple, but expensive. The insurance company keeps the profit if your group has a healthy year.
- Self-funded plans — the employer pays claims directly as they come in. More control and potential savings, but real exposure if your employees have a bad health year.
A level funded plan works like this: you pay a fixed, predictable monthly amount — just like a traditional plan. That payment covers your employees’ claims, stop-loss insurance (which protects you if claims run unusually high), and administration fees. At the end of the year, if your group’s actual claims came in lower than what you paid in, you get a refund of the difference. If claims ran higher, the stop-loss coverage kicks in — so your worst-case scenario is capped.
In plain terms: you get the budget predictability of a traditional plan, with the upside of a self-funded plan. If your employees stay healthy, money comes back to you — not to the insurance company.
Who Is This Really For?
Level funded plans are generally the best fit for:
- Employers with roughly 10 to 150 employees
- Companies whose workforce tends to be younger and relatively healthy
- Business owners who are frustrated watching premiums climb every year with nothing to show for it
- Organizations willing to look at some basic claims data to make a smarter decision
They’re not for every group. If your claims history is high or your employee population carries significant health risk, a fully insured plan may still be the right call. That’s exactly why it takes a real analysis — not just a quote — to evaluate whether this approach makes sense for your specific situation.
Anthem and UnitedHealthcare Are Already There
One of the biggest misconceptions I hear from employers is that level funded plans are only available from obscure or unfamiliar carriers. That’s no longer true. Anthem Blue Cross and UnitedHealthcare — two of the most recognized names in the business — now offer level funded products in California.
What that means practically is significant: your employees may be able to stay in the same network they’re already using, keep their current doctors and hospitals, and maintain continuity of care — while your business transitions to a structure that gives you a shot at real savings.
You don’t have to blow up what’s working. In many cases, the carrier stays the same. What changes is the financial structure behind the plan — and who benefits when your group has a good year.
The Real Advantage: Transparency
Traditional fully insured plans are essentially a black box. You write a check every month and never really know how your claims compare to your premium. Level funded plans flip that. You get actual claims data — what your employees used, what it cost, how your group performed. That information is powerful. It helps you make smarter decisions about benefits design, wellness programs, and year-over-year planning.
For employers who’ve felt like passive passengers on the health insurance train, that transparency is often one of the most valued aspects of switching.
How to Explore This — Without Going It Alone
Level funded plans aren’t complicated to run, but they do require more upfront analysis than a standard renewal. Here’s what the process looks like when we work through it together:
- We pull your current census data and review your claims history (usually the last 12–24 months).
- We run a comparison across carriers — including Anthem and UnitedHealthcare — to see which level funded structure pencils out best for your group.
- We walk through the stop-loss parameters so you understand exactly what your worst-case exposure looks like.
- We compare it side-by-side against your current fully insured renewal so the decision is apples-to-apples.
This isn’t a sales pitch — it’s an analysis. Some groups are a great fit. Others aren’t ready yet. Either way, you walk away with better information than you had before.
Ready to See If This Makes Sense for Your Business?
If you’re a California employer and you’ve never had a real conversation about level funded options, now is a good time to start — ideally before your next renewal cycle creeps up.
Reach out to me directly and we’ll take a look at your situation together. No pressure, no jargon — just a straightforward review of whether this approach could save you money and give you more control over one of your biggest operating expenses.
