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?

Get a side-by-side comparison with actual carrier quotes from TrustMark, Voya, UnitedHealthcare, and more — reviewed by a benefits advisor.

Analyst Notes

Level-funded plan analysis models the three-component cost structure: fixed administrative costs (TPA fees, network access, stop-loss premium), maximum claims liability (aggregate and specific stop-loss attachment points), and the variable claims fund. The potential refund calculation shows the portion of unused claims fund that may be returned, which varies by carrier and plan design.

Stop-loss premium estimates use industry benchmarking data adjusted for group size, demographics, and prior claims experience. Specific stop-loss attachment points are modeled at levels that balance premium cost against catastrophic claim risk. The aggregate corridor is typically set at 125% of expected claims, with some carriers offering tighter corridors for groups with favorable experience.

Level-funded arrangements are increasingly popular for groups with 10-100 employees who want the cost-saving potential of self-funding with the budget predictability of fully insured plans. Groups with younger demographics, lower utilization patterns, or industry classifications with favorable risk profiles tend to see the greatest benefit from this funding approach.