Updated April 2026 · Florida Plan Finder · Licensed Florida Health Insurance Producer

Level-Funded Health Plans for Florida Small Business

Level-funded health plans are a hybrid between fully-insured and self-funded coverage. The Florida small business pays a fixed monthly amount (like fully-insured) but the components are unbundled: an admin fee, a stop-loss insurance premium, and a 'claims fund' set aside to pay actual employee claims. If actual claims come in below the funded amount, the business gets a year-end refund (typically 30-60% of the unused claims fund). If claims exceed expectations, stop-loss kicks in to cap the employer's liability. Level-funded plans require medical underwriting and best fit Florida small businesses with healthier-than-average demographics.

How a Level-Funded Plan Works

At year-end, the carrier reconciles actual claims paid vs the funded claims account. Excess (claims under expectation) returns to the employer in part. Shortage (claims over expectation) is covered by stop-loss.

Year-End Refund Mechanics

Typical refund split:

• 30-60% of unused claims fund returned to employer
• 40-70% retained by carrier as 'risk premium'
• Refund timing: 90-180 days after year-end (depends on claims run-out)

Worked example: $100,000 expected claims, actual claims $70,000 = $30,000 unused. 50% refund split = $15,000 returned to employer.

Stop-Loss Protection

Two stop-loss components:

• Specific (individual) stop-loss: caps the employer's exposure on any single claimant — typically $20,000-$50,000 per individual per year
• Aggregate stop-loss: caps total claims for all employees combined — typically 110-125% of expected

Stop-loss insurance is the difference between level-funded and pure self-funded. With level-funded, the employer's worst-case exposure is the aggregate stop-loss, capping the downside.

Medical Underwriting Required

Unlike ACA-compliant fully-insured small group, level-funded plans medically underwrite the group. Each employee answers a health questionnaire; the carrier prices based on aggregate risk. Implications:

• Healthier groups get better rates (often 10-25% below fully-insured)
• Older or higher-risk groups may get unfavorable quotes or be declined
• Year-2 underwriting can produce significant rate changes if claims experience was poor
• New hires may face mid-year underwriting if material change in group risk

When Level-Funded Wins

• Florida small business with younger workforce (avg <40)
• Industry with low claims trends (professional services, tech)
• Stable workforce (low turnover means consistent underwriting)
• Owner comfortable with year-2 rate volatility
• 10-99 employees (sweet spot for carrier underwriting)

When Fully-Insured Wins

• Florida small business with older workforce or known health conditions
• Industries with higher claims (manufacturing, construction, hospitality)
• Owner wants pure rate predictability year-over-year
• Under 10 employees (level-funded carriers often won't underwrite)
• Multi-state employee mix (level-funded networks can be limited)

Top Florida Level-Funded Carriers (2026)

• UnitedHealthcare All Savers
• Aetna Funding Advantage
• Cigna Level Funded
• Allstate Benefits Health Plan
• Ameritas (some Florida markets)

Florida Blue typically does NOT offer level-funded for small group. Carrier availability varies by Florida county.