---
title: Frequently Asked Questions About Level-Funded Insurance
description: Health benefit costs continue to rise. Level funding is a sustainable solution to the rising cost of employee benefits.
---

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# Frequently Asked Questions About Level-Funded Insurance

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### What is Level-Funded Health Insurance?

Level-funded insurance is a hybrid health plan model that combines predictable monthly payments with the potential cost savings and flexibility of self-funded health care. 

Get quick answers to the most common employer questions about level-funded health plans, including costs, risks, savings opportunities, and plan flexibility. 

[Compare Health Plan Options](https://learn.novahealthcare.com/hubfs/website-materials/level-funding-overview-faqs.pdf)

### Compare Your Current Plan to a Level-Funded Option

##### [How does Level-Funded Insurance work?](https://learn.novahealthcare.com/what-is-level-funded-insurance#collapse1-dnd_area-module-6)

Employers pay a fixed monthly amount that covers claims funding, administrative costs, and stop-loss protection. If claims are lower than expected, employers may receive a refund.

##### [Is level funding better than fully insured health insurance?](https://learn.novahealthcare.com/what-is-level-funded-insurance#collapse2-dnd_area-module-6)

Level funding can offer more transparency, flexibility, and savings opportunities compared to traditional fully insured plans, especially for healthier employee populations. 

##### [How are monthly payments calculated in a level-funded plan?](https://learn.novahealthcare.com/what-is-level-funded-insurance#collapse3-dnd_area-module-6)

 Monthly payments in a level-funded health plan are typically based on expected claims costs, administrative fees, and stop-loss coverage. These fixed monthly payments help employers maintain predictable health plan budgeting throughout the plan year.

##### [Who should consider a level-funded health plan?](https://learn.novahealthcare.com/what-is-level-funded-insurance#collapse4-dnd_area-module-6)

Small and mid-sized employers looking for predictable health plan costs, greater transparency, and potential savings opportunities should consider a level-funded health plan. It can be an ideal option for businesses seeking more flexibility than traditional fully insured coverage. 

##### [Do employers get money back with level funding?](https://learn.novahealthcare.com/what-is-level-funded-insurance#collapse5-dnd_area-module-6)

If actual claims are lower than claims funding,100% of unspent dollars are returned to the client after runout and reconciliation.

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#### Blog Topics

- [A Guide to Reference-Based Pricing](https://www.novahealthcare.com/resources/blog/2026/reference-based-pricing--guide-for-employers-)
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- [Self-Funded Health Plan Cost Drivers](https://www.novahealthcare.com/resources/blog/2026/understand-cost-drivers-that-impact-your-self-funded-plan)
- [From Deductibles to Networks](https://www.novahealthcare.com/resources/blog/2026/help-employees-understand-their-new-benefits)

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