The Differences Between Nevada Small Group Options, Association Health Plans, and Level Funded Plans

Employers always want what’s best for their employees — like great health insurance. But they also want to make sure what’s best for the employees is also best for the company. There are several Nevada small group options available for small businesses, and if you want to choose the right plan, it’s important to understand the differences between Standard Small Group Medical Insurance, Association Health Plans, and Level-Funded Plans. Here’s what you should know.

Eligibility Requirements for Nevada Small Group Options

Before diving into the world of small group insurance, you need to know whether your company qualifies. Here are the main requirements for Nevada small group options:

Fewer than 50 full-time equivalents (FTEs)
At least 2 eligible employees (familial employees don’t qualify)
Participation requirements – some carriers require 50% of eligible uninsured employees to enroll, while others require 75%

Insurance carriers all have varying underwriting guidelines, so be sure to read the requirements for each plan before applying. It’s also important to understand that plan availability differs depending on geography. Rural areas tend to have more association and level funded Nevada small group options compared to more populated areas.

Standard Small Group Medical Insurance: Predictable and Least Risky

Standard small group medical insurance is, well, the “standard.” It’s the most predictable and least risky of all the Nevada small group options. You pay your premium, and you get health insurance for your company — straightforward and simple.

When it comes to standard small group medical insurance, the price is per employee and dependent. That way, you know exactly how much you’ll pay every single month. It’s also not dependent on your claims utilization, so there won’t be any claims-based volatility year over year. It’s typically the simplest to administer and most stable, renewable, and predictable model.

However, the main downside of standard small group medical insurance is that it’s aged based (not gender). Younger, healthier employees who don’t use the insurance very often won’t see decreased rates, since everything is fixed. Older employees nearing 65 may have much higher premiums. And if employees have large families with many dependents, you may also see increased rates.

Standard small group medical insurance is best for:

Employers who don’t qualify for level-funded or association plans
Groups with older demographics
Employers who prefer predictability over potential savings

These types of Nevada small group options are typically more expensive for young, healthy groups, since you don’t see any additional savings by not submitting claims. However, they do offer the least financial risk to the employer.

Association Health Plan (AHP): Shared Risk with Performance Influence

With an Association Health Plan (AHP), employers join an association that provides shared coverage. But with shared coverage comes shared risk, which is why AHPs are typically considered less risky than level-funded plans. Rates are influenced by the overall association claims utilization AND the individual employer’s utilization performance.

AHPs also use a composite rating structure with employee-only, employee + spouse, employee + children, and family plans available. This can reduce the overall cost compared to the age-banded pricing in other Nevada small group options, but renewal rates can still increase based on performance.

Since you need an association to have an Association Health Plan, AHPs are more common in metro areas. They may be hard to find in rural Nevada. They’re a great fit for employers with strong claims history.

Level-Funded Plans: Highest Risk, Highest Reward

If you’re into the high risk/high reward lifestyle, a level-funded plan might be for you. These types of Nevada small group options are based primarily on the individual employer’s utilization.

The employer funds expected claims, stop-loss insurance, and administrative costs, while the carrier covers the rest. If claims are lower than expected, you have the potential for a surplus — which means a refund for you. However, if claims are higher than expected, your renewal rates can jump. One bad claims year could cause a major renewal spike.

Level-funded plans are best for employers with 20 to 49 employees with younger, healthier workforces. You can get some serious savings with low claims utilization, but it does come with higher administrative responsibilities, almost like a large-group plan from a compliance standpoint.

How to Choose the Right Nevada Small Group Options

Choosing the right Nevada small group option for your company is a big decision. You want your employees to be covered, but you also don’t want to pay more than you need.

Here are a few considerations to help you choose the right plan:

Workforce age and health
Your company’s risk tolerance
Budget stability preferences
Geographic location within Nevada’s rating areas

If you prefer low risk and predictable costs, a small group option might be the best fit. Association health plans offer moderate risk with a shared performance model. And level-funded plans have the highest risk but offer the best potential savings.

Since there are so many considerations that go into deciding between the right Nevada small group options, it always helps to work with a local advisor. The team at Health Benefits Associates has an intimate knowledge of the Nevada group insurance landscape and will walk you through the plans to find the right one to suit your company and employees.