Level-Funded vs. Self-Funded: What Employers Need to Know Before 2026

The 2026 Premium Cliff is Real. As we approach the 2026 plan year, CFOs and HR leaders are facing a perfect storm. The expiration of certain ACA subsidies, combined with hospital consolidation, is projected to drive fully insured premiums up by double digits. For companies with 50 to 500 employees, the "fully insured" model has become a financial trap.

The Escape Route: Self-Funding & Level-Funding.

The only way to control costs is to exit the community-rated insurance pool.

Self-Funded (ASO):
Maximum Control. In a traditional self-funded model, you pay for your employees' actual claims plus an administrative fee. If your team is healthy, you keep 100% of the savings. You purchase "Stop-Loss" insurance to protect against catastrophic events.

Level-Funded: The "Training Wheels" Approach. If full self-funding feels too risky, Level-Funding is the answer.

Fixed Budget: You pay a set monthly premium.

The Difference: Part of that premium goes into a claims fund. If you don't use it, you get a refund check at the end of the year.

Safety: You have stop-loss protection, so you never pay more than your maximum liability.

HealCo's Approach.

Whether you choose Self-Funded or Level-Funded, the secret to savings isn't just the financial structure—it's the care model. By layering Direct Primary Care (DPC) and Maestro's AI routing into the plan, we reduce the frequency of claims, ensuring that your refund check is as large as possible.