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

Based on New York's average fully insured PEPM of $850 and typical level-funded discounts, employers can expect to save approximately 8% on a level-funded plan in the expected claims scenario. Best-case savings with surplus refunds can reach 20-30%. The New York cost index of 1.22 affects both fully insured and level-funded pricing.

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

Stop-loss costs in New York are indexed at 1.2 relative to the national average. For a $50,000 individual specific attachment point, expect approximately $155 x 1.2 = $186 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 New York?

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 New York, the complex carrier market provides strict regulation limits level-funded savings potential.

What carriers offer level-funded plans in New York?

Level-funded carriers in New York include UnitedHealthcare Level-Funded, Cigna Level-Funded. Fully insured carriers for comparison include Empire Blue Cross Blue Shield, UnitedHealthcare, Aetna, Oscar, EmblemHealth. New York's level-funded market is classified as complex, with a minimum group size of 10 employees for most carriers.

New York Level-Funded vs Fully Insured
Savings Calculator

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

New York Level-Funded Market at a Glance

Avg FI Premium PEPM

$850/mo

LF Savings Potential

8% avg

Cost vs National Avg

+21%

LF Market

Complex

Min Group Size: 10 employees

Surplus Return: 30-55% of unused claims fund

LF Carriers: UnitedHealthcare Level-Funded, Cigna Level-Funded

Mandates: Most extensive state mandates in the nation; community rating with no age rating for small groups

Your Company

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

State ?New York has a cost index of 1.22 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 New York are available for groups of 10+ 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 New York-specific data.

Current Monthly Premium PEPM ($) ?Per-employee-per-month blended premium (employer + employee share). New York's average is ~$850/mo for single coverage. If you don't have current coverage, use the New York average as a benchmark.Source: KFF 2025 Employer Health Benefits Survey; New York DOI Rate Filings

Annual Renewal Increase ?Expected annual increase in fully insured premiums. New York's average trend is 9.0%. 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. New York's stop-loss factor is 1.2x 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

What This Means For You

In plain English: Level-funded is a way to pay for your team's health coverage that sits between traditional fully insured plans and full self-funding. You pay a fixed monthly amount (just like fully insured), but that payment gets split into three buckets: one for expected medical claims, one for admin fees, and one for stop-loss protection (catastrophic claim coverage). If your team is healthier than expected, you get money back. If claims run high, the stop-loss kicks in and caps what you owe.

Why it matters in New York: New York employers pay an average of $850/month per employee for traditional fully insured coverage. Level-funded alternatives in New York typically save around 8% -- that is real money, especially when you multiply it across your whole team for a full year. The complex carrier market means you have some options to shop around.

Getting Started Checklist:

Gather your current fully insured renewal documents and census data
Run the numbers in this calculator with your actual group demographics
Request quotes from at least 2 level-funded carriers
Compare stop-loss terms, admin fees, and surplus return provisions
Ask about network options -- make sure your team's doctors are in-network
Review the worst-case scenario to make sure your business can handle it
Work with a licensed benefits advisor who knows the New York market

Level-Funded Health Coverage in New York: What Employers Need to Know

New York presents the most complex regulatory environment for level-funded health plans in the nation. The state uses pure community rating (no age rating) for small groups, has the most extensive list of state-mandated benefits, and has enacted specific legislation addressing stop-loss insurance that affects how level-funded plans operate. New York employers considering level-funded arrangements need experienced benefits counsel to ensure compliance.

New York's Department of Financial Services has historically scrutinized level-funded and stop-loss arrangements to prevent what regulators view as attempts to circumvent the state's community rating and consumer protection requirements. The state has established minimum attachment point requirements for stop-loss insurance and has considered legislation that would further regulate level-funded plans. Despite these challenges, level-funded plans remain available in New York, with UnitedHealthcare and Cigna as the primary carriers.

The economics of level-funded plans in New York are driven by the state's extremely high fully insured baseline costs (cost index of 1.22) and the elimination of age rating for small groups. For employers with younger workforces, the gap between community-rated fully insured premiums and experience-rated level-funded pricing can be substantial. However, the regulatory complexity and higher minimum group sizes (typically 10+ employees) mean that level-funded adoption in New York is lower than in more permissive states.

Frequently Asked Questions: Level-Funded Plans in New York

Is level-funded health coverage available in New York? +

Yes. New York employers have access to level-funded health plans from carriers including UnitedHealthcare Level-Funded, Cigna Level-Funded. The minimum group size is typically 10 employees. Level-funded plans in New York are treated as self-funded under ERISA, providing flexibility in plan design and potential savings.

How much can New York employers save with level-funded? +

Based on New York's average fully insured PEPM of $850 and typical level-funded discounts of 8%, 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 New York, typical surplus return provisions are 30-55% of unused claims fund. With fully insured plans, the carrier keeps the difference.

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

Level-funded plans work best for New York employers with 10-250 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 New York market is classified as complex for level-funded options.

Built on Real Data -- Not Guesswork

This calculator uses New York-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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New York DOI Filings

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

Want a Custom Level-Funded Quote for New York?

Get a side-by-side comparison with actual carrier quotes from UnitedHealthcare Level-Funded, Cigna Level-Funded -- reviewed by a benefits advisor who knows the New York 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 (1.22 for New York) 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 New York's stop-loss factor (1.2) 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: New York's index of 1.22 adjusts base claims for state-level provider costs, utilization patterns, and regulatory environment. Based on CMS Geographic Practice Cost Index and New York 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, New York Department of Insurance filings.

New York Level-Funded vs Fully InsuredSavings Calculator