If you’ve ever owned a small business, you know what it feels like to watch expenses go up while if feels like the value is going down. Phil knows that feeling too well.
He runs a small IT consulting firm in Fort Worth. His people are young, work hard, stay healthy, and rarely use their health insurance. So when his renewal showed another double-digit rate hike, Phil just stared at the paper like it was some kind of joke.
Except it wasn’t. That was the new premium from the big giant insurance company.
Phil knows something has to change, but he isn't sure what to do next. He doesn't want to offer junk health coverage to his dedicated team. But he also can't afford to keep writing huge checks to a health insurance plan that nobody uses. So he reached out to Insurance For Texans and asked us if there was a better way to do this.
Our Texas health benefit specialist found one for him. It’s called a level-funded health plan. How does it work?
If you're in a hurry, here are the three key takeaways you need to know right now.
If you need a deeper understanding of this subject, we also have FAQs at the bottom of the page. Now back to Phil's story.
Phil had been on a fully insured plan through the biggest health insurance company in Texas for years. That meant every month, he paid the insurance company a chunk of money. And every year, they raised the rates. Whether his team used the plan or not didn’t seem to matter. He just paid more.
With level-funded health plans, that equation changes.
The monthly payment still shows up, but now it’s broken into three parts. One part goes to administrative fees. One part pays for stop-loss insurance in case something big happens. And the third part goes into a fund to pay for the actual medical claims that come in.
Here’s where it gets good.
If Phil’s employees don’t have heavy claims experience and stay below the stop-loss amount in claims account during the plan year, he can see some of it refunded.
It’s not magic. It’s just a smarter way to manage claims risk. If your team stays healthy like Phil's team typically does, you ultimately save money on healthcare costs. It finally feels like the plan is working with you instead of against you.
Phil thought it sounded too good to be true because no one had ever showed him this was possible. Then we ran the numbers for him. Our agent showed him the structure and where his health insurance costs would be going. And he saw for himself how it worked. That’s when he realized this wasn’t just different, it was better.
One of Phil’s biggest frustrations with his old plan was how much he was paying for stuff that had nothing to do with providing care.
Big insurance companies have layers of people, buildings, and marketing budgets that all need to get paid. And those administrative costs get baked into every premium they send out for employee benefits. Phil was helping fund a system that didn’t actually serve his business or his people.
Level-funded insurance plans strip a lot of that out.
They’re lean. They’re built for small groups. They typically have less risk than self-funded plans. And they cut out the fluff. The money Phil spends each month goes to coverage and claims management, not to some executive’s bonus.
That alone made a huge difference in how Phil felt about offering employee benefits to his team. For the first time, he didn’t feel like he was being ripped off just for trying to do the right thing. He felt like he could have real cost control.
Phil’s old plan came with a menu. Three options, all bad. High monthly premiums, narrow provider networks, or copays that made employees think twice before going to the doctor.
By using a plan with level funding, the menu instantly got bigger. He could actually build something that made sense for his team.
Our agent knew how to ask important questions and put the pieces of great health coverage together for them. They looked at how often his employees used care, what kind of in-network providers they preferred, and how to structure health benefits that kept the coverage meaningful without driving up healthcare costs.
They even added in access to a direct primary care clinic, giving his team a way to handle routine care without claims data piling up.
Now Phil’s employees could actually use their health insurance plan without getting crushed by out-of-pocket costs. And Phil isn’t stuck overpaying for an employer-sponsored plan that didn’t serve anybody.
It finally felt like the plan fit the business instead of the other way around.
Phil didn’t stumble into this plan on his own.
He asked the right questions and got connected to someone who understood how small business health plans work here in Texas. Someone who wasn’t just selling what the big carriers push. Someone who knew the overall health market, the carriers, and the plan options that actually work.
That’s why Insurance For Texans exists.
We help business owners like Phil every day. Whether you are an IT consulting firm or a landscaping company, we have different employee health options available for you to consider.
We love working with people who are trying to do the right thing for their team but feel boxed in by the options in the health care marketplace they’ve seen. Level-funded health insurance plans aren’t right for every business, but for a lot of Texas companies, they can be a game-changer.
It all comes down to having someone in your corner who understands the terrain and knows how to build something that makes sense.
Our agents will look at your current plan, walk you through how level-funded group health plans actually work, and show you whether it could be a fit for your business.
And if not? We’ll tell you that too. No pressure. Just a straight answer from someone who actually knows how this works.
Click the button below to get real options employee health benefits.