By Summer Westerbur
I just returned from MJBizCon, the largest cannabis conference of the year. This year, I heard from dispensary owners across the country that many haven’t been quoted level-funded health plans. It’s open enrollment — a time many business owners are reviewing their health plan options — so I thought this would be a good time to discuss these. I spoke to several dispensaries whose benefits were offered through a payroll company. They are frequently limited to a few fully-insured plans and lack the ability to shop the market. It’s important to have an independent health broker who has access to all plans, especially considering today’s health insurance premiums.
Level-funded health plans were historically offered to large businesses; today carriers offer plans to employers with ten employees. Moving from a fully insured health plan to self-funding can seem daunting for smaller employers. The good news is that there is a hybrid solution called level-funded health plans for employers that want to move away from fully insured health care but are not yet ready to completely self-insure. Without going into too much detail, they look like a fully-insured health plan to the employee. Your broker can help you design copays for doctor visits, pharmaceuticals, and other benefits. With a level-funded plan, an employer pays a health carrier the same monthly amount to cover the estimated cost for expected claims, the premium for stop-loss insurance that covers health care costs over a set dollar amount, and plan administration costs. If total claims costs are higher or lower than expected, the carrier makes adjustments at the end of the plan year in the form of a refund to the employer for lower claims or a premium increase on the stop-loss insurance renewal for higher claims. Stop-loss coverage is an essential part of this arrangement because it limits an employer’s financial responsibility for claims over a certain amount, either on a per-employee basis or for the entire covered population.
Some carriers offer fully customizable benefits. It is possible to create copays for lab and x-ray, emergency room visits, and more. In the fully-insured market, these are frequently applied to a member’s deductible, so level-funded health plans allow us to customize an employee benefits package to fit the employer’s needs. Wellness plans and teledoc visits can be included with these plans.
Level-funded plans are more complicated to quote and set up, but they can offer a multi-year strategy rather than shopping rates at renewal every year. Carriers will often accept fully-insured group applications through the last day of the month for fully-insured plans and quotes can often be obtained within hours whereas level-funded plans require employees to complete a medical questionnaire and have deadlines for submission. It’s also important to have an accurate census when quoting because a census change can drastically alter the rates. If this is an option you’re interested in for January 1, you should be looking at your options now.
As always, please feel free to reach out with any questions. I have helped employers design employee benefits packages since 2004.
Summer Westerbur, founder of Kairos Insurance Group, is experienced in all types of insurance including employee benefit packages, product liability, general liability, professional liability and building insurance. Kairos also has expanded to include a Cannabis Division to address the unique challenges facing the cannabis industry and its employees. For more information, contact Summer@kairosinsurancegroup.com or call (719) 331-1832.
