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Three Steps That May Help Some Employers Save 15% or More on Health Care Costs

By Mary Zarn, Division CEO, UnitedHealthcare

When it comes to offering health benefits to employees, every employer has two primary goals: improve coverage and lower costs.

Achieving those goals may help encourage a healthier workforce, while reducing absenteeism and presenteeism, both of which can sap productivity and make an employer less competitive. To that end, the growing popularity of level-funded plans may make it possible for employers to save up to 15% compared to their existing benefits package.

To help employers, especially small businesses with fewer than 50 employees, navigate the transition from fully insured to level-funded health plans, here are three steps to consider:

Evaluate Plan Options. Historically, employers often selected either a fully insured plan or, as companies grew larger, moved to a self-funded arrangement, which yielded potential savings but came with additional financial risks if medical costs exceeded expectations. A third option employers have recently adopted more often is a level-funded plan, which offers the potential savings available through self-funded plans but with less financial risk. Employers with levelfunded plans pay a fixed monthly fee to cover claims, administrative fees and stop-loss insurance, which helps protect against unexpectedly large claims. If medical claims are lower than expected, the employer can potentially keep some of the surplus refund at year end.

Request a Level-Funded Quote. To determine if such upfront savings would be possible for your business, the next step is to request a level-funded quote. This can be coordinated by an insurance broker or by connecting directly with a UnitedHealthcare representative. Generally, employers with relatively younger and healthier workforces may save the most. In fact, employers with UnitedHealthcare level-funded plans on average paid 18% less than comparable fully insured plans. [1]

Leverage Various Types of Technology. Once an employer opts for a level-funded plan, it is important to help employees and their families play a more active role in their well-being. One way to achieve that is by including a wearable device well-being program, where individuals use fitness trackers to monitor activity levels and may earn financial incentives for meeting certain goals. Employers with level-funded plans should also include coverage and resources related to virtual care, offering employees a more convenient and affordable way to access medical care, including primary care visits, behavioral health care and chronic condition management.

By considering a move to a level-funded plan and adopting these strategies, employers may make offering medical coverage to their workforces more affordable and personalized.

Average savings for UnitedHealthcare fully insured groups migrating to Level Funded for 2020 and 2021.