Traditional group, level funded and ICHRA
Is Group Health Insurance Right for Your Business?
Many employers assume group health insurance is too expensive or that they don't have enough employees to qualify. In reality, there are more options available today than ever before.
The comparison
What we'll help you evaluate
- Whether a traditional group plan makes sense
- If a level-funded plan could reduce costs
- Whether an ICHRA offers greater flexibility
- Which carriers provide the strongest provider networks in your area
- The overall value of each option, not just the monthly premium
Three ways to structure coverage
Understanding Your Health Insurance Options
Group coverage for a small business usually comes down to one of three structures: fully insured, level-funded, or an ICHRA. Each shifts cost and risk differently, so the right fit depends on your group's size, claims history, and whether you value budget certainty or control over what employees receive.
Traditional coverage
Fully Insured Group Health Insurance
A fully insured plan is the traditional model. You pay the carrier a fixed monthly premium, and the carrier takes on the risk of paying employee claims.
- Predictable monthly premiums set for the full plan year
- The carrier assumes the financial risk of employee claims
- Simple to explain and already familiar to most employees
- Renewal rates are based on your group's overall claims experience
- Broad carrier and network choices across Texas
Best suited for: businesses that want budget certainty and a plan employees already understand.
A hybrid approach
Level-Funded Health Insurance
A level-funded plan blends the predictability of a fully insured plan with some of the savings potential of self-funding. You pay a fixed monthly amount covering claims, administration and stop-loss protection, and if the group's actual claims run under projections, you may see money back at year end.
- Fixed monthly payment, so budgeting works like a fully insured plan
- Stop-loss coverage caps your exposure if claims run high
- Potential refund if claims come in under projections for the year
- More visibility into your own group's claims data
- Often priced more competitively than fully insured for healthier groups
A rough claims year can mean no refund, so this is a tradeoff worth reviewing against your group's actual history. Best suited for: established businesses with a stable, healthier employee population.
Employee choice model
ICHRA: Individual Coverage Health Reimbursement Arrangement
An ICHRA lets you set a fixed monthly allowance for each employee to buy their own individual health plan, instead of enrolling everyone in one group plan. You control the budget, employees choose the coverage that fits their situation, and the allowance can be tax-free for both sides when it is structured correctly.
- You set a defined contribution instead of choosing one plan for everyone
- Employees shop the individual market and pick the plan that fits them
- Contribution amounts can vary by employee class, such as full-time versus part-time
- No participation minimums or group underwriting to qualify
- Employees may also qualify for ACA marketplace subsidies, depending on the allowance
- Your budget stays fixed and predictable from year to year
ICHRAs carry more moving parts: notice requirements, employee classes, and coordination with any marketplace subsidies employees might otherwise qualify for. Best suited for: businesses that want to fix their contribution and let employees choose their own coverage.
How to decide
Which Option Is Best for Your Business?
The right choice depends on your business, not a general rule. A few factors tend to matter most:
- Plan design: how much flexibility employees need in choosing doctors and coverage levels
- Employee participation: how many of your employees are likely to enroll
- Workforce demographics: age, health history and family size across your team
- Long-term strategy: cost predictability now versus more control over spending later
We'll walk through your specific numbers so you can see how each option plays out for your business, not just in general terms.
How it works
Our Process
Learn About Your Business
We take time to understand your employees, budget, current coverage, and long-term goals.
Compare Your Options
We review plans from multiple insurance companies and present the solutions that best fit your needs.
Make an Informed Decision
We'll explain the tradeoffs between each option so you can choose with confidence.
Ongoing Support
Our relationship doesn't end after enrollment. We're available throughout the year to answer questions, assist with renewals, and help as your business grows.
Questions
Group Health Insurance questions
How many employees do I need to qualify for group health insurance?
Can I lower my health insurance costs without reducing benefits?
Which insurance companies do you work with?
What's the difference between fully insured and level-funded health insurance?
Is an ICHRA a good fit instead of a group health plan?
Ready to Explore Your Options?
Choosing employee benefits is an important decision, but it doesn't have to be stressful. We'll help you compare your options, understand the differences, and build a benefits strategy that supports both your employees and your business. Schedule a consultation today and let's find the right solution together.
Rather just talk it through? Call Jordan Schwabe at (210) 410-0472.