Zenefits Partners With Aetna to Offer Level Payment Self-Funded Plans

May 22, 2017

As healthcare expenses soar, employers are seeking ways to lower costs and simplify the delivery of medical benefits to their employees. Our topic today explains an avenue employers can take to explore lower health plan costs without accepting higher risks. Level payment self-funded plans are that avenue.

We’re pleased to announce that our all-in-one digital HR platform now includes the full integration of Aetna Funding Advantage (AFA) level payment self-funded plans. As part of this rollout, we’re partnering with Aetna to offer businesses another option for insuring their employees.

Zenefits Broker Services helps businesses select the best plans for their specific needs. With level payment self-funded plans, employers still pay a fixed monthly premium just like a fully insured plan, but the premiums are used in a different fashion. Level funded premiums pay for administrative costs, claims, and an embedded stop loss policy aimed at limiting the financial exposure of the employer. Companies with good claims experience can lower their annual healthcare costs by as much as 25% or more.

What is Level Funding?

Level payment self-funded plans combine the fixed premiums of fully insured plans and the financial advantages of self-insured plans. With level funding, businesses pay a pre-determined fee to a Third Party Administrator (TPA) that processes and pays claims and collects premiums. These plans have an individual and aggregate stop-loss insurance policy embedded, which protects employers if an individual or the entire group’s claims exceed a certain dollar amount. After the end of the year-long plan, a TPA will refund the company if claims came in lower than projected. If claims exceed the aggregate stop loss amount, then the company will be protected from this overage by the embedded stop loss policy.

The health plans are very similar to plan designs of fully insured plans with comparable deductibles, coinsurance, and copays. Each state determines the minimum number of employees required to get a stop loss policy issued and what amount the stop loss may be for each employee.

Level payment self-funded plans are emerging as a popular option because it provides the predictability of a fully insured plan, but companies only pay for the actual healthcare costs its employees incur.

Zenefits offers a variety of level funding options available from Aetna (platform integrated), CIGNA, Anthem CO, BCBS TX, UHC, as well as others.

Benefits of Level Funding

Level payment self-funded plans provide businesses with a range of benefits, including:

  • Cost savings: potential for lowering monthly premium outlays
  • Level premiums: rates based on claim maximum
  • Financial protection: stop loss coverage protects employer from worst case scenario
  • Plan flexibility: wide range of products
  • Exclusions: certain government-mandated benefits
  • Monthly reporting: transparency into plan performance
  • Shared savings: opportunity to receive percentage of the unused claim surplus
  • Tax benefits: exemption from state premium taxes (2-4%)
  • Exemption from state laws: level payment self-funded plans are not subject to state jurisdiction or litigation at the state level, and they avoid state level appeal and complaint procedures

Is Level Funding Right for Our Company?

Level payment self-funded plans are a great option for certain companies that want more flexibility and lower costs. In general, groups should be healthy and expect a low number of high-cost claims. These companies should be between 5-49 enrolled EE’s (in most states), and want to move away from the ACA community rating.

These plans may also by the right choice if a group wants to understand claims data and how it will impact the group’s rates. These groups should be open to a long-term (3-5 years) approach to containing costs. Finally, groups should be interested in the possibility of getting part of their costs back through a surplus.

Features Unique to the Aetna Funding Advantage (AFA) Product

  • 33 Open Access Plans available – groups can offer up to 4
  • Available in 28 states (not allowed in NY or CA) 5-100 lives
  • Broad national network of providers available on the Choice POS II Network
  • Individual Medical Questionnaires are NOT required for groups 15 lives and above
  • Premium bills are sent electronically and paid via the ACH
  • Entire enrollment process is paperless

Zenefits’ Mobile-Friendly Flow Makes Integration Easy

Once a company chooses level payment self-funded plans, it will need an easy and fast way to integrate the new plans. Zenefits’ mobile-friendly flow streamlines this process, saving companies time – while providing employees with a quick enrollment process.

Our team of insurance experts can help you determine if level payment self-funded plans are right for your company and available in your state. Contact us to learn what your best options are for providing great employee health benefits.


Bud Bowlin ran his own benefits agency for over 15 years and was regional manager at Rogers Benefit Group for over 20 years. Combined with time in the military and law enforcement, Bud has an expansive career of serving others. Having just celebrated his 72nd birthday, Bud is now focused on the Zenefits transition from being a digital broker to being a world-class provider of HCM SaaS software to companies. He has never felt younger.

Category: Zenefits, Benefits, Health Care Cost

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