America's Benefit Specialist November 2022

THE BENEFITS OF QUOTING A LEVEL-FUNDED PLAN

By Daniel MacLeod Sales Consultant Trustmark Small Business Benefits Columbus, Ohio

still reluctant to quote this arrangement. Don’t miss the opportunity to stand out and help your clients find a viable solution to offering an affordable benefits package and attracting and retaining employees. Did you know there is valuable informa tion provided in the quoting process of a level-funded product? Explore the benefits of quoting level-funded plan designs, which includes getting base rates, selecting the best options for underwriting, getting a summary of medical data and an overview of the advantages. GET A HEAD START WITH BASE RATES Whether you call them base, illustrative, street, preferred or initial, these rates mark the starting point of medically underwritten groups. These are the lowest rates available prior to any medical underwriting for com prehensive major medical plan designs with stop-loss insurance coverage.

Employees at small companies (two-99) prioritize health insurance as their num ber-one benefit, with 401K/other and paid leave as second and third, respectively. 1 Eighty-one percent of employees at small companies see medical (health) insurance as a must-have, while 13% said it was a nice-to-have and six percent said it was not needed. 1 Small to midsize employers that want to make health benefits accessible and afford able to their employees should consider alternatives to fully insured plans. In 2021, 21% of U.S. workers from small firms were covered by self-funded health benefit plans. 2 A type of self-funding becoming increas ingly popular for small to midsize employ ers is level funding. Forty-two percent of small firms report that they have a lev el-funded plan, a much higher percentage than the previous two years. 3 While level funding can provide savings for smaller employers, many brokers are

Some may argue these rates are mean ingless as they are not final rates and give a false sense of availability; however, they can serve a purpose. These rates form the kickoff to develop ing a renewal strategy and evaluating op tions for your existing groups as well as new business groups with a carrier/third-party administrator. When base rates are: • low, it can initiate the discussion regard ing the medical underwriting processes and the value in proceeding. • high, it might validate the new plan year/ renewal rates are fair. Base rates can typically be obtained with employer information such as: • Name • Address • Industry/SIC code • Census

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