Sample group medical renewal
Your 2026 renewal
Effective January 1 · 12-month rate
- Current monthly
- $18,400
- Renewal monthly
- $21,780
- Added annual cost
- +$40,560
Composite example of a fully insured small-group renewal. Not a specific carrier notice.
Level-funded group medical
Level-Funded Health Plans for Employers
Stop writing bigger checks for the same coverage.
Fully insured renewals keep climbing because unused premium stays with the carrier. Level-funded and self-funded plans let small-group employers cap the cost, keep surplus when claims run well, and hold rates steadier for two to three years.
Curious whether level funding could fit your team? Ask for a no-obligation review of your options.
Employers · about 15–200 employees · Licensed California, Arizona, and Utah
+18.4%
Level-funded alternative
Same employees. A known maximum cost.
- Fixed monthly funding — looks like a premium to payroll
- Stop-loss protection if claims run high
- Unused claims-fund dollars can return to you
- Pricing designed to hold 2–3 years
Up to 20%
Lower cost vs. many traditional PPO plans
2–3 years
Pricing designed to stay level, not spike
15–200
Employees — the small-group sweet spot
30 years
Local brokerage in the Inland Empire
The problem
Fully insured plans are simple. They are also an expensive habit.
Every fall the same letter arrives. Premiums up. Benefits thinner. Employees asked to pay more. The carrier is not broken — the structure is. You are renting coverage and forfeiting the unused premium.
The carrier keeps the unused premium
On a fully insured plan you pay a fixed premium whether your group has a quiet year or a rough one. If claims come in light, that surplus does not come back to you.
Renewals are built to climb
Each year the invoice comes back higher — 8%, 12%, 18% — even when your team’s utilization barely changed. Deductibles rise, networks shrink, and you still write a bigger check.
You are paying for the pool, not just your people
Fully insured rates bake in state premium tax, mandated benefits, ACA minimum-loss-ratio overhead, and cost-shifting from other groups. Healthy small employers subsidize the rest.
How it works
Self-funding mechanics. Fully insured simplicity.
A level-funded plan is a self-funded ERISA plan wrapped in a predictable monthly bill. Your employees still get ID cards and go to the doctor. You stop overpaying for a black-box premium.
- 01
You pay one level monthly amount
It looks and feels like a premium. The bill is predictable, so cash flow is as simple as fully insured.
- 02
Claims come out of your claims fund
A defined portion of each payment sits in a claims account for your group. You see the data. There is no black box.
- 03
Stop-loss caps the downside
Specific and aggregate reinsurance sits on top so a large claim — or a bad year — cannot run away with the budget. You have a known maximum cost.
- 04
Unused dollars can come back
If claims run under the fund, surplus is typically shared back with the employer instead of staying with the carrier. That is the point.
Where a fully insured dollar goes
Claims (typical)78¢
Carrier margin, tax, admin22¢
Unused claims dollars stay with the carrier. You never see them.
Where a level-funded dollar goes
Claims fund (refundable)68¢
Stop-loss + administration32¢
If claims run under the fund, surplus is typically shared back with you.
Splits are typical structures for illustration, not a quote. Actual administration, stop-loss, and claims-fund percentages are set at underwriting.
Is level funding a fit for your group? Two-minute self-check
Level funding isn't one thing. It's a spectrum. On one end, guaranteed-cost level funding: the carrier still carries the risk, and you get a lower rate and a better renewal because you're priced on your own experience. On the other end, true risk-sharing: you don't need to fund 12 months of claims. You're just funding the same premium you'd pay on a fully insured plan. You won't see results until about a year later, and you can share in a surplus if one's available. Five questions tell us which end fits you.
Question 1 of 5
How many employees are enrolled?
Five enrolled is the floor, not the sweet spot. At 5, your odds of getting premium back are not great. It's possible, but one large claim can eat the reserve. The more people paying into premium, the better your odds of getting money back. 35 or more is where risk-sharing gets genuinely attractive, but it's a sliding scale, not a cutoff.
This is a general self-check, not legal or tax advice. Consult your attorney, CPA or TPA before making a funding decision.
Cost comparison
What a 12% renewal costs if you stay.
Enter the monthly premium you pay now. If you stay fully insured, that bill compounds at each renewal. Level funding is built to hold the monthly cost instead. No savings percent to guess.
$28,700
$5,000$150,000
If you stay, each renewal
+12%
6%25%
By year 3, staying puts the bill at $36,001 a month. Holding the rate keeps it at $28,700.
Extra cost of staying, 3 years
$128,943
The gap between taking a 12% renewal each year and holding today’s premium.
This year
- If you stay
- $344,400
- If the rate is held
- $344,400
- Extra if you stay
- $0
Year 2
- If you stay
- $385,728
- If the rate is held
- $344,400
- Extra if you stay
- $41,328
Year 3
- If you stay
- $432,015
- If the rate is held
- $344,400
- Extra if you stay
- $87,615
3-year total
- If you stay
- $1,162,143
- If the rate is held
- $1,033,200
- Extra if you stay
- $128,943
Illustration only — not a quote or guarantee. It assumes a level-funded plan holds today’s monthly premium. A lower starting rate, if underwriting supports it, would widen the gap. Surplus refunds are not included.
Compare
Fully insured vs. level-funded, without the jargon.
Employees should not have to notice a change. The employer should.
| Topic | Fully insured | Level-funded |
|---|---|---|
| Monthly payment | Fixed premium. Gone once you pay it. | Fixed “level” amount. Part is a claims fund you can share in. |
| Unused claims dollars | The carrier keeps them. | Surplus is typically refunded or credited back to you. |
| Renewals | Often 8–25% increases, year after year. | Designed to remain level for 2–3 years, with a known max cost. |
| Large claims | Priced into the premium, whether you have them or not. | Stop-loss (reinsurance) caps individual and aggregate risk. |
| Transparency | Little visibility into your own claims. | You see the fund, the claims, and the trend. |
| Employee experience | ID cards, network, copays — familiar. | Same day-to-day experience. Claims are settled behind the scenes. |
| Who it fits | Any size, including groups that cannot pass underwriting. | Typically 15–200 employees with a healthy-enough risk profile. |
Why employers switch
Keep coverage whole without feeding a 15% renewal.
The goal is not a skinnier plan. It is a funding structure that stops punishing groups that run well — and still protects you when a year does not.
Built for shops, crews, and offices of about 15–200 — not just white-collar campuses.
A ceiling on cost, not a hope
Level-funded plans are built with a guaranteed maximum cost — often held for two years — so you can budget without bracing for a surprise renewal letter.
Surplus stays closer to you
When your group is healthier than projected, unused claims-fund dollars can be returned. Fully insured never works that way.
Employees keep a familiar experience
ID cards, doctor visits, and pharmacy look like a regular group plan. Advocacy and 24-hour physician access are available on many designs.
Less premium bloat
These are typically ERISA plans. That structure can strip out state premium tax and a stack of mandated add-ons that inflate fully insured rates.
Claims you can actually see
You get reporting on how the plan is running. That is how you manage trend instead of being surprised by it every September.
Room to keep benefits whole
Savings on the medical spend can be used to avoid shifting more cost onto employees — or to stack dental, vision, life, and disability without stretching payroll.
Who this is for
This is a structure for healthy-enough small groups — not a miracle product.
NP Benefit Services works with employers of all sizes in California, Arizona, and Utah. Level funding is the right conversation when the fully insured market is no longer a fair price for the risk you actually bring.
A good conversation if
- Employers with roughly 15–200 full-time employees in California, Arizona, or Utah
- Groups staring at another double-digit fully insured renewal
- Owners who want a known maximum cost and a chance at surplus back
- Teams that need employees to keep a normal ID-card experience
Not the first call if
- Groups that cannot meet participation or underwriting (level funding is not guaranteed issue)
- Employers under ~15 enrolled who need an ACA small-group or individual solution instead
- Anyone promised “savings” without a census, plan design, and stop-loss quote
1791 Third Street, Norco, CA — local brokerage, not a call center.
Request a quote
Put last year’s renewal next to a level-funded quote.
Send a census and current plan summary — or start with this form. We will walk the numbers with you. No extra open-enrollment fees. Year-round service from Norco.
- Call
- 888-954-8999
Questions
Straight answers before you share a census.
Level funding is not a loophole and it is not for every group. If these answers do not match your situation, we will tell you.
This site explains level funding. For a quick product quote use https://xgb.npbenefitservices.com. For broader group benefits start at https://www.npbenefitservices.com.
What is level funding?
Level funding is a group health funding approach that sits between traditional fully insured coverage and full self-funding. Employers typically pay a set monthly amount that covers expected claims, administration, and stop-loss protection. Unused claim funds may be eligible for return depending on the program and year-end results. It is not the same as a standard fully insured policy.
How is level funding different from fully insured?
With fully insured coverage, the carrier sets the premium and keeps the risk and most of the claims detail. With level funding, employers often see more transparency into claims and cost drivers, and may share in favorable claim years through surplus arrangements defined by the program. Renewals and stop-loss terms still matter, so fit depends on the group.
Who is a good fit for level funding?
Level funding is often a fit for employers who want more insight into healthcare spend than a fully insured renewal provides, and who can evaluate stop-loss and cash-flow tradeoffs. Many programs work well for groups in the roughly 15–200 employee range, though fit always depends on claims history, location, and risk tolerance. NP Benefit Services helps you compare options against fully insured before you decide.
What is reference-based pricing, and how does it relate to level funding?
Reference-based pricing is a way some plans set reimbursement for certain medical services using a reference point such as a multiple of Medicare, rather than traditional discounted network rates alone. It is sometimes discussed alongside level funding when the goal is more predictable spend while keeping usable benefits for employees. It is not right for every group; we walk through network access, member experience, and savings potential case by case.
Can I get a quote?
Yes. You can run a hands-on look at a level-funded product with the XGB Quote Calculator at https://xgb.npbenefitservices.com, or call NP Benefit Services at 888-954-8999 and we’ll walk through whether level funding fits your group.
Curious whether level funding could fit your team? Ask for a no-obligation review of your options.