iHEAL- Level-Funded Plans: Risk and Compliance

Level-funded arrangements are marketed to small and mid-size employers as an alternative to ACA-rated fully insured coverage, but they are self-funded ERISA welfare plans supported by stop-loss insurance. This course examines the structure of the arrangement, the components of the monthly payment, the contractual terms that determine whether the employer's liability is genuinely capped, the tax and fiduciary treatment of surplus funds, and the federal reporting obligations that shift to the plan sponsor when a group leaves the fully insured market. The course is analytical and carrier-neutral; it does not promote, compare, or recommend any insurer, product, or program.

Learning Objectives

• Distinguish a level-funded arrangement from a fully insured policy and from a traditional self-funded plan, and identify the legal consequences of that distinction for the plan sponsor.
• Identify the components of the level-funded monthly payment — specific stop-loss premium, aggregate stop-loss premium, administrative fees, and claims funding — and explain what each component buys.
• Explain terminal liability, describe how run-out periods operate under a 12/18 stop-loss contract, and evaluate whether a proposed arrangement leaves post-plan-year exposure with the employer.
• Analyze contract provisions governing surplus claims funds, including the incurred-versus-paid basis, the carrier/employer split, and the employer's role in the reconciliation.
   

Approved for 2 hours of Health Benefits credits
Date: October 13, 2026
Time: 9AM - 11AM
Speaker: David Smith

Cost: Free for iHEAL members!