Health Plan Funding Options
Most employers are placed into insurance plans without ever evaluating whether the funding structure itself is optimal.
Strategic Benefits Advisory helps employers evaluate multiple funding models using a risk-first framework that analyzes claims data, workforce demographics, and long-term cost drivers.
Instead of starting with insurance quotes, we determine which funding strategy actually fits your organization.
Employers we advise may qualify for:
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Self-Funded Health Plans
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Level-Funded Plans
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Captive Risk Pools
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ICHRA Reimbursement Models
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Optimized Fully-Insured Plans
Not every organization qualifies for alternative funding models — which is why risk qualification always comes first.
Understanding Health Plan Risk
Employer health plans fall across a risk spectrum:
RISK TRANSFER
Insurance carrier absorbs the risk
RISK SHARING
Employer and carrier share risk
RISK RETENTION
Employer assumes risk with protection from catastrophic claims
Each funding strategy fits somewhere within this spectrum.
Your organization’s size, claims history, and risk tolerance determine which structure is appropriate.
ICHRA
(Individual Coverage Health Reimbursement Arrangement)
Best for: smaller or geographically distributed workforces.
ICHRA allows employers to reimburse employees for individual health insurance using tax-advantaged contributions.
Benefits include:
• predictable employer budgets
• expanded employee choice
• simplified administration
ICHRA is particularly effective for organizations with remote employees or variable workforce sizes.
Captive Arrangements
Best for: employers seeking long-term stability and shared risk.
Captive arrangements allow multiple employers to participate in a structured risk pool.
Advantages may include:
• improved underwriting leverage
• reduced volatility
• potential participation in underwriting profits
Captives are often used by employers who want multi-year healthcare funding stability.
Traditional Self-Funded
Best for: mid-size and large employers seeking long-term cost control.
In a self-funded model, the employer pays healthcare claims directly rather than paying fixed premiums to a carrier.
Stop-loss insurance protects the employer from catastrophic claims exposure.
Advantages:
• full claims transparency
• customizable plan design
• long-term cost optimization
• ability to capture underwriting gains
Self-funding allows employers to move beyond the annual renewal cycle and manage healthcare costs strategically.
Level-Funded
Best for: growing employers seeking predictable costs with potential savings.
Level-funded plans combine elements of fully insured and self-funded models.
Employers pay a fixed monthly amount that covers:
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expected claims
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administrative costs
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stop-loss protection
If claims are lower than expected, the employer may receive a surplus refund.
Alternative Funding Comparison
Strategy Employer Size Risk Level Cost Control
FULLY INSURED
LEVEL FUNDED
SELF FUNDED
CAPTIVE
ICHRA
SMALL
SMALL-MID
MID-LARGE
MID-LARGE
SMALL
LOW
MODERATE
HIGHER
SHARED
LOW
LOW
MODERATE
HIGH
HIGH
HIGH
Two Strategic Paths: Stability vs. Upside
3-Year Rate Lock
Fixed Costs for 3 Years
No Renewal increases
Full cost predictability
Institutional Backing
Best For:
Risk-averse organizations
Budget Stability
Captive Model
Shared Risk Structure
Potential Dividends
Greater Long Term Upside
Transparency into spend
Best For:
Growth-oriented organizations
Willing to accept some variability
3-YEAR RATE STABILIZATION
Institutional Self-Insured with Rate Stabilization
For employers who pass a strict risk assessment, a different model exists.
Through Ascend Funding — built on proprietary benefits technology and backed by three of the largest banks in the world — qualified employers can access:
If the employer qualifies:
The rate is locked for three years.
No annual up or down adjustments.
If claims exceed projections and hit stop-loss thresholds, the underwriting institutions absorb that exposure — not the employer.
If claims outperform, there may be end-of-term arbitrage or surplus opportunity.
This is not traditional stop-loss. It is aggregate-backed risk stabilization.
Underwritten by major financial institutions and supported by firms such as Ryan Risk and Ternian, the structure is designed to:
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Stabilize volatility
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Remove renewal shock
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Take contingent liability pressure off the balance sheet
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Align administration into the funding model
Zero risk only applies if the employer qualifies through assessment.
Not every group will. That discipline is the protection.
Execution matters as much as structure.
01
Risk Qualification
We evaluate:
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claims data
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population health
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demographics
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cost drivers
02
Strategy Design
We determine which funding model best aligns with your organization’s risk profile and financial objectives.
03
Market Placement
We coordinate underwriting, third-party administrators, and stop-loss carriers.
04
Ongoing Optimization
The strategy evolves based on claims performance, renewal pressure, and organizational changes.
