Small Groups Can Combat Rising Healthcare Premiums with Level Funding

The rising cost of employee healthcare has more small employer groups choosing level funding over their traditional fully-insured health plans. What are the advantages of this option for your small business?

Cost Control and Opportunity for Savings

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Level funding is a form of partial self-funding that enables the employer to budget for monthly expenses while enjoying the financial advantages that larger organizations have enjoyed for years. With level funding, the employer pays a set amount each month to cover fixed costs as well as anticipated claim costs. Stop loss insurance funds claims that exceed the employers funding limit. If claims are below the funding limit, the surplus remains in the employer’s claim fund.

Other Advantages of Level Funding Include:

  • Easy to Operate
  • High Performance PPO Networks
  • Expert Administration
  • And More…

Level Funding with DG/25+

dgb-minutemanDiversified Group’s DG/25+ is a level funded health plan that offers flexibility and cost control for employers in Massachusetts and New Hampshire. This plan operates very much like a fully-insured health plan. Employers of 25 or more can establish a monthly health plan budge, while still enjoying the economic advantages of self-funding.

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Overtime Rules Tough on Small Business

overtimeNew rules mandated by the Department of Labor could affect many small businesses, driving up labor costs and creating more red tape. These rules, effective on December 1, 2016, raise the salary threshold for eligible workers from $23,660 to $47,476 and to $134,004 for highly compensated employees. This means that salaried workers earning less than $47,476 will now be eligible for time-and-a-half for every hour they work beyond 40 hours per week. While the rules were intended to help millions of workers, they assume that every business will absorb the increased costs and pay overtime, rather than limiting hours for salaried employees.

Research by the National Federation of Independent Business shows that nearly half of all small businesses will be affected by the mandate. NFIB foresees a slowdown in productivity if salaried employees are forbidden from exceeding 40 hours per week. Another concern is that some employees may be converted from salaried to hourly, effectively receiving a demotion.

The rules also include a mechanism to automatically update the salary and compensation levels every three years in order to ensure that they continue to provide useful and effective tests for exemption.

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