Choosing the right health plan structure is one of the most important financial and strategic decisions for employers. While fully insured plans remain common, many small and mid-sized businesses are exploring alternatives like self-funding or level-funding to gain more control over costs.
📊 Side-by-Side Comparison
| Feature | Fully Insured | Self-Funded | Level-Funded |
|---|---|---|---|
| Monthly Costs | Fixed premiums to the carrier | Variable, based on actual claims | Fixed monthly (predictable) |
| Risk Exposure | Carrier assumes all risk | Employer assumes all risk | Employer has partial risk, limited by stop-loss |
| Claims Data Access | Limited or none | Full access | Partial to full, depending on plan |
| Flexibility | Low — carrier designs plan | High — employer designs plan | Moderate — within a structured framework |
| Potential Savings | None — carrier keeps surplus | High if claims are lower than expected | Moderate — potential refunds on favorable claims |
| Best Fit For | Employers seeking simplicity | Larger employers with reserves and risk tolerance | Small to mid-sized employers wanting predictability |
🔎 Key Takeaways
- Fully Insured: Simple and predictable, but often the most expensive over time.
- Self-Funded: Maximum control and potential savings, with higher risk.
- Level-Funded: Middle ground — predictable monthly costs with possible refunds.
🧭 How Employers Can Decide
- Budget Sensitivity: If predictability is critical, fully insured or level-funded may be best.
- Risk Tolerance: Employers with higher tolerance and reserves may benefit from self-funding.
- Transparency: Level-funded and self-funded plans offer more claims insight.
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Talk to a Specialist →This article was prepared by HealthPlanBrief.com, a resource dedicated to simplifying health coverage decisions for individuals and businesses. For more educational insights and resources, visit HealthPlanBrief.com.
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