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
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.
SoCal employers · 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.
Savings example
What three more years of 12% renewals actually costs.
Set your current premium and a typical renewal increase. Compare that path with a level-funded structure that takes a first-year reduction and is designed to hold the rate.
Enrolled employees
35
10200
Current premium, per employee / month
$820
$400$1,800
Expected fully insured renewal
+12% / year
6%25%
Level-funded year-one reduction
15%
8%22%
Current spend $28,700/month · $344,400/year
Three-year illustration
$283,923
Potential three-year difference versus staying fully insured. Year one alone: $51,660.
Year 1
Fully insured
$344,400
Level-funded
$292,740
Year 2
Fully insured
$385,728
Level-funded
$292,740
Year 3
Fully insured
$432,015
Level-funded
$292,740
- Fully insured, 3 years
- $1,162,143
- Level-funded, 3 years
- $878,220
Illustration only — not a quote or guarantee. Level-funded rates are underwritten. Surplus refunds, if any, would add to employer savings and are not included here. Stop-loss, admin, and claims fund are bundled in the level rate.
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 SoCal employers of all sizes. 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.
It sits between fully insured and traditional self-funding. You pay a fixed monthly amount that covers administration, stop-loss insurance, and a claims fund. It feels like a regular group premium to you and to employees, but the plan is built on a self-funded chassis — so unused claims dollars can come back, and you are not funding as much carrier overhead.