How to present a level-funded renewal

What arrives, and what is missing

A level-funded renewal packet normally contains the renewal illustration with next year's fixed monthly cost, a claims experience report for the year to date, the stop-loss renewal terms including any lasers, and a settlement statement once the year has closed. What it rarely contains is the comparison the client actually wants: what they paid, what their claims cost, and whether the arrangement worked.

If the funding mechanism itself still needs explaining, whether to the client or to a colleague picking up the file, that is level-funded health plans explained. This guide assumes the year has already been run.

Ask for anything missing before building the presentation. The two documents most often absent are the laser schedule and the paid-through date on the claims report, and both change what the numbers mean. A claims report paid through month ten of twelve is not a year of experience, and presenting it as one will be wrong in the client's favour, which is the worst direction to be wrong in.

The five numbers to compute before the meeting

1. Funded versus actual claims. The claims portion of what the employer paid, against what the plan actually spent. This one ratio is the story of the year.
2. Total cost of the year. Fixed monthly payments times twelve, less any surplus returned. This is what to compare against the fully-insured premium the group would otherwise have paid.
3. The fixed-cost change. Administration and stop-loss next year against this year, separated from the claims funding. Bundled renewals move all three at once and the client should see which moved.
4. The attachment point change. Both the specific deductible and the aggregate corridor. A renewal that looks flat can carry materially more employer risk.
5. Laser impact. For every lasered member, the extra exposure between the standard specific deductible and the lasered one, summed.

These come off documents that differ by carrier and rarely align by line item. Renewal analysis puts the current year and the renewal side by side with the change on each component, and document parsing reads the illustration and the experience report so the five numbers are extracted rather than retyped.

Renewals effective January 1, 2027: what to recheck

Three figures the IRS reset for 2027 touch a level-funded renewal directly.

• Affordability. If the group is an applicable large employer, the employee's contribution for self-only coverage on the lowest-cost plan that provides minimum value may not exceed 10.22% of household income, or of a safe-harbor substitute for it, for plan years beginning in 2027, up from 9.96% (Rev. Proc. 2026-26). A renewal that moves the employer's share is the moment to re-run it in the ACA affordability calculator.
• HSA-qualified options. If the line-up includes an HDHP, the 2027 minimum deductible is $1,750 self-only and $3,500 family, and the out-of-pocket maximum is capped at $8,700 and $17,400 (Rev. Proc. 2026-24). A design carried over unchanged from 2026 can fall below the new minimum and lose HSA eligibility.
• Penalty exposure. The two Section 4980H amounts rise for 2027 and attach to different failures (Rev. Proc. 2026-22). The $5,670 amount, under 4980H(b), applies for each full-time employee who receives a premium tax credit because the employer's offer was unaffordable or did not provide minimum value. The $3,780 amount, under 4980H(a), applies when the employer does not offer coverage to at least 95% of its full-time employees (or all but five of them, if that is more) and at least one full-time employee receives a premium tax credit.

Presenting a year that produced a refund

Lead with the total cost of the year against the fully-insured alternative, not with the refund. The refund is the pleasant part, and it is also the part that invites the wrong expectation. A client who anchors on it will read next year's smaller settlement as a failure. Frame the surplus as evidence that the group's claims are better than community rating assumed, then move straight to what the claims data says they should do about it.

That is the moment the account gets defended. A renewal meeting that ends with three specific actions drawn from the claims report, whether that is a pharmacy conversation, a contribution change or targeted communication for a high-utilisation category, is a meeting a competitor cannot reproduce from a rate sheet.

Presenting a year that did not

When claims ran over the funded amount, say so in the first minute and show that stop-loss did its job. Identify which eligible claims were reimbursed and what the employer actually paid. Confirm exclusions, lasers, contract basis and run-out before saying the employer reached a cost cap; a fixed monthly funding amount alone does not prove that. Then separate what is repeatable from what is not. A single large claimant who has since left the group is a different renewal conversation from a broad rise in utilisation across the population.

Expect the renewal to reflect the year. Show the alternatives honestly, including a return to fully insured, and price them. A broker who puts the fully-insured option on the table after a bad level-funded year keeps the account more often than one who defends the funding choice.

The Maryland Insurance Administration advisory explains retained employer risk and stop-loss exclusions; its discussion of state protections is specific to Maryland. Apply the actual policy, plan documents and relevant jurisdiction to the account.

Four traps

• Comparing the wrong pair of numbers. Next year's maximum cost against this year's expected cost will always look like a large increase. Compare like to like, then show both.
• Assuming the refund repeats. Surplus is the result of one year's claims. Budget the client at the fixed cost and treat any settlement as recovery, never as forecast income.
• Missing a laser. Lasers appear in the stop-loss terms, not the illustration, so a renewal that reads as competitive can carry a much higher exposure on one member. Check the schedule every year.
• Forgetting run-out when moving. If the group changes carrier, confirm who pays claims incurred this year and presented next. This is the most expensive oversight in a level-funded move.

The structure that works

Three slides carry the meeting. One: what the year cost, against what it would have cost fully insured. Two: what the claims data shows, in three findings and no more. Three: the options for next year with maximum and expected cost for each, current carrier first. Everything else is appendix, and the appendix is where the laser schedule and the experience detail belong for the client who asks.

The general presentation structure is in how to present benefit options to clients. If the renewal turns into a funding conversation, level-funded vs self-funded covers the next step, and reading the stop-loss terms on a level-funded quote covers what to check on whatever comes back from market.