Level-Funded vs Fully Insured Calculator

Model your potential savings with level-funded health insurance — see best-case, worst-case, and expected scenarios side by side

Free • No Login Required • Calibrated to 2026 Market Data

Step 1 — Your Group

Group demographics are the single biggest factor in level-funded pricing. Younger, healthier groups see the most savings potential.

Number of Employees ?Full-time employees eligible for health benefits. Level-funded plans are most common for groups of 10-250 employees. Below 10, options may be limited; above 250, self-funded is usually more cost-effective.Source: KFF 2025 EHBS; TrustMark Level-Funded Guidelines

State ?State regulations affect level-funded availability and stop-loss requirements. Some states (NY, NJ) regulate level-funded plans as fully insured. Others have minimum attachment point rules.Source: NAIC Stop-Loss Model Act; State DOI Regulations

Average Employee Age 38 ?Average age of covered employees. Level-funded underwriting heavily weights age — younger groups get better rates and lower stop-loss premiums. Each year above 40 adds roughly 2-3% to expected claims.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

% Employee Only 60%

% EE + Spouse 20%

% Family 20%

Step 2 — Current Fully Insured Plan

Enter your current fully insured costs so we can model exactly how a level-funded alternative compares. If you don't have current coverage, use the default as a benchmark.

Current Monthly Premium PEPM ($) ?Per-employee-per-month blended premium across all tiers. National average is ~$703 for single coverage in 2025. This is the total premium (employer + employee share).Source: KFF 2025 Employer Health Benefits Survey

Annual Renewal Increase 10% ?Expected annual increase in your fully insured premiums. Fully insured renewals have averaged 7-12% nationally. Bad claims years can trigger 15-25% increases. Level-funded plans are less susceptible to renewal shock.Source: Mercer National Survey 2025; Segal Health Plan Cost Trend Survey

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

Step 3 — Level-Funded Model

These parameters define how your level-funded plan would be structured. The claims ratio, stop-loss attachment, and admin fee determine your monthly cost and risk exposure.

Expected Claims Ratio 70% ?The portion of premium that goes to paying medical claims vs. carrier profit, admin, and reserves. Fully insured carriers typically have 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

Stop-Loss Attachment Point ?The per-person annual deductible on your stop-loss policy. Claims above this amount for any individual are covered by the stop-loss carrier. Lower attachment = more protection but higher stop-loss premium. Most level-funded plans use $40K-$100K individual specific.Source: NAIC Stop-Loss Model Act; Sun Life/Voya Stop-Loss Rate Manuals

Admin Fee Estimate 15% ?Third-party administrator (TPA) fees, network access charges, 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

Level-Funded vs Fully Insured Analysis

Fully Insured

per month total

$0/yr

Level-Funded (Expected)

per month total

$0/yr

Expected Annual Savings with Level-Funded

0% lower than fully insured

Based on expected claims scenario with current group demographics

Level-Funded Monthly Cost Breakdown (PEPM)

Component	PEPM	Monthly Total	% of Total

Scenario Analysis — What Could Happen?

Best Case (Low Claims Year)

Surplus refund potential

Expected (Average Claims)

Typical savings range

Worst Case (High Claims Year)

Stop-loss caps your exposure

Risk Spectrum — Where Does Level-Funded Sit?

Fully Insured
(Lowest Risk) Level-Funded
(Moderate Risk) Self-Funded
(Higher Risk) Full Self-Insured
(Highest Risk)

3-Year Cost Projection

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 x age factor x industry adjustment. 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. Lower attachment = higher premium but more protection. Rates from Sun Life/Voya reference schedules adjusted for 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. No surplus, no shortfall — typical 5-15% savings vs fully insured.
- Worst Case: Claims run 130% of expected, but stop-loss (both specific and aggregate) caps total exposure. Maximum cost is capped at claims fund + stop-loss corridor (typically 125% of expected).

State Cost Index:
Adjusts base claims for state-level provider costs, utilization patterns, and regulatory environment. Based on CMS Geographic Practice Cost Index and state premium filings.

Age Factor:
Uses CMS 3:1 age rating curve. Age 21 = 1.0, age 40 = 1.278, age 64 = 3.0. Normalized to the baseline age of 38.

3-Year Projection:
Fully insured trends at the entered renewal rate. Level-funded trends at 75% of the fully insured rate because claims experience has more direct impact on renewals.

Data Sources: SOA Group Health Experience Study, Mercer National Survey of Employer Health Plans 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, state insurance department filings.

Built on Actuarial Data — Not Guesswork

This calculator uses real underwriting models and published actuarial data to estimate level-funded plan costs and savings potential.

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SOA Claims Tables

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

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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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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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50-State Compliance

State-level stop-loss regulations, minimum attachment point rules, and level-funded plan classification guidelines

Want a Custom Level-Funded Quote?

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