How much can Colorado employers save with level-funded vs fully insured?

Based on Colorado's average fully insured PEPM of $680 and typical level-funded discounts, employers can expect to save approximately 13% on a level-funded plan in the expected claims scenario. Best-case savings with surplus refunds can reach 20-30%. The Colorado cost index of 0.95 affects both fully insured and level-funded pricing.

What is the stop-loss cost for level-funded plans in Colorado?

Stop-loss costs in Colorado are indexed at 0.98 relative to the national average. For a $50,000 individual specific attachment point, expect approximately $155 x 0.98 = $151 PEPM before age and industry adjustments. Lower attachment points ($25K-$40K) provide more protection but cost more.

What are the risks of level-funded plans in Colorado?

The primary risk is that actual claims exceed the claims fund, requiring the employer to cover the shortfall up to the aggregate stop-loss corridor (typically 125% of expected). However, specific stop-loss caps individual catastrophic claims, and aggregate stop-loss caps total group exposure. In Colorado, the very competitive carrier market provides multiple carriers provide competitive renewal environment.

What carriers offer level-funded plans in Colorado?

Level-funded carriers in Colorado include UnitedHealthcare Level-Funded, Cigna Level-Funded, Aetna Funding Advantage, Sana Benefits. Fully insured carriers for comparison include Anthem Blue Cross, Kaiser Permanente, UnitedHealthcare, Cigna, Friday Health Plans. Colorado's level-funded market is classified as very competitive, with a minimum group size of 2 employees for most carriers.

Colorado Level-Funded vs Fully Insured
Savings Calculator

Compare level-funded and fully insured health plan costs for your Colorado business. See potential savings, surplus refunds, and worst-case scenarios -- powered by Colorado-specific carrier data and actuarial benchmarks.

Colorado Level-Funded Market at a Glance

Avg FI Premium PEPM

$680/mo

LF Savings Potential

13% avg

Cost vs National Avg

-5%

LF Market

Very Competitive

Min Group Size: 2 employees

Surplus Return: 50-80% of unused claims fund

LF Carriers: UnitedHealthcare Level-Funded, Cigna Level-Funded, Aetna Funding Advantage, Sana Benefits

Mandates: ACA plus state mandates for acupuncture, hearing aids, and mental health parity

Your Company

Tell us about your Colorado business so we can model level-funded vs fully insured costs using Colorado-specific rates and carrier data.

State ?Colorado has a cost index of 0.95 relative to the national average (1.00). This affects claims fund calculations, stop-loss pricing, and overall level-funded plan costs.Source: KFF 2025 State Health Facts; CMS GPCI Data

Number of Employees ?Full-time employees eligible for health benefits. Level-funded plans in Colorado are available for groups of 2+ employees. Groups of 10-250 are the sweet spot for level-funded savings.Source: KFF 2025 EHBS; UnitedHealthcare Level-Funded Underwriting Guidelines

Average Employee Age ?Average age of covered employees. Level-funded underwriting heavily weights age. Each year above 40 adds roughly 2-3% to expected claims. Younger groups get better rates and lower stop-loss premiums.Source: CMS Federal Age Curve; SOA Group Health Experience Study

Industry ?Industry affects claims experience and level-funded pricing. Healthcare and construction workers tend to have higher claims. Tech and professional services trend lower. Carriers use SIC/NAICS codes for underwriting.Source: SOA Group Health Experience Study; Mercer National Survey 2025

Coverage Tier Mix ?Distribution of employees across coverage tiers affects blended costs. National average: ~55% single, ~15% EE+spouse, ~30% family. Adjust to match your workforce.Source: KFF 2025 Employer Health Benefits Survey

% Employee Only

60%

% EE + Spouse

20%

% Family

20%

Current Plan & Level-Funded Model

Enter your current fully insured costs and configure the level-funded model parameters. We'll show a side-by-side comparison using Colorado-specific data.

Current Monthly Premium PEPM ($) ?Per-employee-per-month blended premium (employer + employee share). Colorado's average is ~$680/mo for single coverage. If you don't have current coverage, use the Colorado average as a benchmark.Source: KFF 2025 Employer Health Benefits Survey; Colorado DOI Rate Filings

Annual Renewal Increase ?Expected annual increase in fully insured premiums. Colorado's average trend is 7.8%. Fully insured renewals average 7-12% nationally. Level-funded plans are less susceptible to renewal shock.Source: Mercer National Survey 2025; Segal Health Plan Cost Trend Survey

10%

Plan Tier ?ACA metal tiers determine actuarial value. Higher tiers mean richer benefits and higher premiums, but also higher expected claims in a level-funded model.Source: CMS Actuarial Value Calculator

Expected Claims Ratio ?Portion of premium going to medical claims. Fully insured carriers run 80-85% loss ratios (ACA MLR floor). Level-funded plans target 65-75% expected claims as a percentage of the fully insured equivalent premium.Source: ACA Medical Loss Ratio Rules; TrustMark/Voya Level-Funded Reference Data

70%

Stop-Loss Attachment Point ?Per-person annual deductible on stop-loss policy. Claims above this for any individual are covered by stop-loss. Lower attachment = more protection but higher premium. Colorado's stop-loss factor is 0.98x national average.Source: NAIC Stop-Loss Model Act; Sun Life/Voya Stop-Loss Rate Manuals

Admin Fee Estimate ?TPA fees, network access, and plan management costs. Typically 12-18% of the fully insured equivalent premium. Includes claims adjudication, reporting, compliance, and customer service.Source: Mercer National Survey 2025; SPBA TPA Fee Benchmark Study

15%

Include Pharmacy Carve-Out? ?Carving out pharmacy to a separate PBM can reduce costs by 5-10% on the pharmacy component, which is typically 25-30% of total claims. Adds complexity but improves transparency.Source: Pharmacy Benefit Management Institute; PBMI 2024 Trends Report

Level-Funded Health Insurance in Colorado: What Employers Need to Know

Colorado's health insurance market is one of the most dynamic in the country, with strong competition among both fully insured and level-funded carriers. The state's cost index of 0.95 is slightly below the national average, and Colorado employers have access to a wide range of level-funded options. The growing tech sector and relatively young workforce in metro Denver make many Colorado employers excellent candidates for level-funded plans.

Colorado runs its own state-based exchange (Connect for Health Colorado), but this primarily affects individual and small-group fully insured markets. Level-funded plans, treated as self-funded under ERISA, operate outside the exchange framework. Colorado does have several state-specific benefit mandates that add to fully insured plan costs, and ERISA preemption can help level-funded plans avoid some of these mandated benefit costs, though responsible plan sponsors typically include most standard benefits regardless.

The Colorado stop-loss market is robust, with multiple reinsurers competing for business. Stop-loss pricing in Colorado runs close to national averages, and attachment points as low as $25,000 individual specific are available. Colorado's Division of Insurance has taken a relatively neutral stance on level-funded plans, neither actively promoting nor restricting them, which creates a stable regulatory environment for employers considering this funding approach.

Frequently Asked Questions: Level-Funded Plans in Colorado

Is level-funded health insurance available in Colorado? +

Yes. Colorado employers have access to level-funded health plans from carriers including UnitedHealthcare Level-Funded, Cigna Level-Funded, Aetna Funding Advantage, Sana Benefits. The minimum group size is typically 2 employees. Level-funded plans in Colorado are treated as self-funded under ERISA, providing flexibility in plan design and potential savings.

How much can Colorado employers save with level-funded? +

Based on Colorado's average fully insured PEPM of $680 and typical level-funded discounts of 13%, employers can expect meaningful savings in the expected claims scenario. Best-case savings with surplus refunds can reach 20-30%, while worst-case exposure is capped by stop-loss insurance.

What happens if claims are higher than expected? +

Stop-loss insurance protects against catastrophic claims. Individual specific stop-loss covers any single claimant above the attachment point (e.g., $50,000). Aggregate stop-loss caps total group claims at 125% of expected. Your maximum exposure is predetermined and contractually limited.

What if claims are lower than expected? +

This is where level-funded shines. If your group's claims are below the funded amount, you receive a surplus refund. In Colorado, typical surplus return provisions are 50-80% of unused claims fund. With fully insured plans, the carrier keeps the difference.

Which Colorado employers are the best fit for level-funded? +

Level-funded plans work best for Colorado employers with 2-250 employees, younger-than-average workforces, and a desire for cost transparency. Industries with lower claims risk (technology, professional services, education) often see the best results. The Colorado market is classified as very competitive for level-funded options.

Built on Real Data -- Not Guesswork

This calculator uses Colorado-specific actuarial data, carrier rate filings, and published survey benchmarks.

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KFF Employer Survey

2025 benchmarks from 2,000+ employers on premiums, plan design, and funding type distribution

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SOA Claims Tables

Society of Actuaries group health experience studies for expected claims modeling by age and industry

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Stop-Loss Rate Data

Sun Life and Voya reference rate schedules for specific and aggregate stop-loss pricing by attachment point

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Colorado DOI Filings

State-level rate filings, carrier market share data, and regulatory requirements from Colorado's insurance department

Want a Custom Level-Funded Quote for Colorado?

Get a side-by-side comparison with actual carrier quotes from UnitedHealthcare Level-Funded, Cigna Level-Funded, Aetna Funding Advantage, Sana Benefits -- reviewed by a benefits advisor who knows the Colorado market.

Calculation Methodology

Fully Insured Cost: Current PEPM x number of employees x 12 months. Projected forward using the annual renewal increase rate.

Level-Funded Breakdown:
- Claims Fund: PEPM x claims ratio x state cost index (0.95 for Colorado) x age factor x industry adjustment x plan tier multiplier. This is held in a claims account to pay medical expenses.
- Admin Fee: PEPM x admin percentage. Covers TPA fees, network access, compliance, and reporting.
- Stop-Loss Premium: Based on attachment point selected. Adjusted by Colorado's stop-loss factor (0.98) and group demographics.
- Total Level-Funded: Claims Fund + Admin Fee + Stop-Loss Premium.

Scenario Modeling:
- Best Case: Actual claims at 55% of expected. Employer receives ~50% of surplus (unused claims fund) as a refund.
- Expected Case: Actual claims match the expected claims fund. Typical savings vs fully insured.
- Worst Case: Claims run 130% of expected, but stop-loss caps total exposure at 125% of expected claims fund.

State Cost Index: Colorado's index of 0.95 adjusts base claims for state-level provider costs, utilization patterns, and regulatory environment. Based on CMS Geographic Practice Cost Index and Colorado DOI rate filings.

Data Sources: SOA Group Health Experience Study, Mercer National Survey 2025, KFF 2025 Employer Health Benefits Survey, TrustMark/Voya level-funded reference data, Sun Life stop-loss rate manuals, NAIC stop-loss model regulations, CMS Federal Age Rating Curves, Colorado Department of Insurance filings.

Colorado Level-Funded vs Fully InsuredSavings Calculator