Alternate Funding

Alternate Funding Plans


Why You Should Make the Switch

More employers than ever are switching to alternate funding health insurance plans for two primary reasons: cost control and improved adaptability

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Take Control of Your Costs

Traditionally insured policies often combine your risk factors with those of others, creating limitations and prices over which you have no influence. Alternate funding allows you to control these risk factors for a better overall plan outcome. 

Plans that Adapt to You

Gone are the days of cookie cutter, rigid insurance plans. Alternate funding gives you the freedom to design and create fully customized health benefit packages which can adapt to meet your company’s needs. Future-proof your benefits. 

Overcoming Challenges with AEIS

An alternate funding plan comes with its own distinct set of challenges, but you can conquer them all with support from the AEIS team. We’ll ensure you are well prepared to handle the considerations that come with an alternatively funded plan, such as unexpectedly large medical claims, affecting future premiums.


We will also work to facilitate a greater degree of employee communication, making certain your employees are not only offered the greatest options but are using them correctly too.


In short, no matter what unique challenges you face on your road to alternate funding, you can count on AEIS to deliver the experience and skills necessary to produce the most complete and seamless benefits experience possible. 

When Does Alternate Funding Make Sense?

Looking for alternate funding options is always a good option for employers with 15 employees or more. In fact, for mid to large-size employers, some alternative funding options almost always makes sense. However, no matter what size business you own, all types of benefits plans should be considered to ensure you are choosing the smartest option for your current needs.


Alternate funding is a broad ecosphere with a wide range of solutions suited for just about any sized organization. Annual evaluation of these programs and how they fit your organization will be the best way to determine which course of action is right for you.


As your benefits partner, our role is to compile expected and worst case cost scenarios, discuss various plan designs, and ensure you understand any potential changes alternate funding options will make to your health plan so you can decide when “the right time” becomes now. 

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Alternate Funding Options We Suggest

  • Level Funding

    Leveraging the power of level funding is a great way to enjoy the benefits of self-funded plans with less involved risk. A “middle ground” between fully-insured and completely self-funded plans, level-funded plans allow employers to pay fixed premiums to an insurance company like a normal fully-insured plan. However, if the claims are lower than expected, any savings are then passed onto the employer as a refund or premium credit. 

  • HRAs – Health Reimbursement Arrangements

    Funded by employers themselves, Health Reimbursement Arrangements (HRA’s) are designed to deliver greater flexibility when it comes to your benefits. Sometimes referred to as Health Reimbursement Accounts, this style of alternate funding allows employers to customize the reimbursement format of their HRA to be as rich or conservative as they wish. When done right, you will be paying the premium of a Bronze or Silver plan, but your employees will perceive their coverage as that of a Gold or Platinum option.


    HRA’s can be a great, low-risk way for employers to save money and headaches. For example, you can choose to have your HRA cover expenses before or after the deductible, copays, coinsurance, and more. Alternatively, you could structure your HRA to require employees to pay a portion of the deductible along with a co-pay. At the end of the year, any unused funds are then re-absorbed by the employer. 


    When accompanied by a fully-insured High Deductible Health Plan (HDHP), HRA’s are generally considered as fully-insured health plans for state and federal tax/reporting purposes. 


  • Self-Funding for Dental and Vision

    Another easy and low risk way to dip your toe in the waters of self-funded benefits is to consider using the method for dental or vision plans at first. Usually, a dental plan will pay a maximum of about $2,000 in benefits per year, per member, making it a nice way for organizations to take their time adjusting to other self-funded options down the road.

Ready to Consider Alternate Funding?

Want to dig deeper into alternate funding options that are right for your business? Let’s get started. Partner with AEIS and pave the way for the future success of your benefits, your business, and your employees.

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Learn more about our processes and our approach

Listen to our podcast with Kruze Consulting where our President Ron Bland, and our benefits consultant Dillon Castro, discuss different strategies, trends and ideas we commonly employ with our clients.

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