Types of Group Health Plans—What’s Right for Your Business?
Last week, we introduced the basics of what a group health plan is. This week, we’re diving deeper into the different types of group health plans available—and how to know which one might fit your organization best.
Whether you’re a small business owner trying to offer benefits for the first time or a growing company evaluating new options, understanding your choices is the first step.
Fully-Insured Plans
This is the most traditional model. The employer pays a fixed premium to an insurance carrier, which assumes all the risk and handles the claims.
Pros
- Predictable monthly costs
- Simple to manage
- Little to no risk for the employer
Best For
Employers who want a straightforward, low-risk plan and are okay paying a little more for that predictability.
Level-Funded Plans
This option blends the stability of fully-insured with the cost-saving potential of self-funding. You pay a set monthly amount that covers claims funding, stop-loss insurance, and administrative fees. If claims are lower than expected, you may get a refund at year-end.
Pros
- Potential for premium savings
- Monthly costs are predictable
- Detailed claims data for smarter decisions
Best For
Employers with 5+ employees looking for more control and long-term savings.
Self-Funded Plans
In this model, the employer assumes the financial risk of providing healthcare. You pay claims directly as they come in and typically purchase stop-loss insurance to cap catastrophic expenses.
Pros
- Greater control and customization
- No profit margin paid to a carrier
- Opportunity for significant savings
Best For
Larger employers or those comfortable with risk management and cash flow variability.
ICHRA (Individual Coverage HRA)
An Individual Coverage Health Reimbursement Arrangement allows employers to reimburse employees for individual health insurance premiums rather than offering a traditional group plan.
Pros
- Flexible and budget-friendly
- No minimum participation requirements
- Employees pick the plan that works best for them
Best For
Small businesses, companies with variable or remote workforces, or those looking for an alternative to traditional group coverage.
Which One Is Right for You?
Each of these models has its strengths—and the “right” fit depends on your company size, goals, risk tolerance, and budget. The good news? You don’t have to navigate it alone.
Coming Next Week: We’ll look at what drives your group health premiums—and how you can take control of rising costs.
Ross Durham, Employee Benefits
For more information contact the Beck / Frost Insurance Agency. Call us at 419-446-2777, send an email to help@beckinsurance.com, or click here to submit your request today! You can also stop by and see us at one of our four convenient locations in Archbold, Napoleon, Holgate, or Whitehouse.
