Level Funded Plans for Small Businesses

Blue Balance Funded is a level funded product – combining characteristics of self-funded plans, (as an underwritten, ASO product) and fully insured plans (offering predictable rates and financial protection).

Level funded rates are made up of three parts:

1. administrative costs – such as claims administration, commissions, network access, etc.
2. projected claims funding - what BCBSTX expects group claims to be during the contract term
3. stop-loss coverage – financial protection if claims are higher than expected

Eligibility is based on:

• ERISA qualifying small group
• 12-months of previous coverage
• Good financial standing, no history of delinquencies
• In 2025: minimum 10 enrolled employees (or 75% participation, whichever is greater) up to 50 employees
• NEW FOR 2026: minimum 5 enrolled employees (or 75% participation, whichever is greater) up to 50 employees
• Employer contribution of 50%+ toward the lowest-cost, employee only plan
• At least 75% employee participation, minus valid waivers

Blue Balance Funded contracts are 12 months. BCBSTX will review the group and decide if the group can be offered a new 12-month Blue Balance Funded contract for next year’s renewal or if the group needs to move back to a fully insured plan.

If your group leaves the Blue Balance Funded plan before the contract ends, the run-out period will cover claims that happened while the group was still active.

Blue Balanced Funded is an underwritten product. This means that we consider the health of employees when determining the rate. Fully insured plans, under the Affordable Care Act (ACA), offer a fixed premium based only on age and zip codes.

In addition, because Blue Balance Funded is a level funded product, it is not required to include mandated benefits like pediatric dental or vision coverage (which must be included in fully insured / ACA plans).

Think of it as forecasting – but not for weather, this is forecasting for claims. Through years of experience, we can accurately forecast claims based on the group’s characteristics and statistical data.

But, like the weather – sometimes the unexpected can happen. If one, or more, employees’ claims exceed the claims forecast, stop loss coverage continues to offer protection and the group will not be financially responsible for those claims.

BCBSTX pays those unexpected claims as part of the stop loss protection. The group is NOT responsible for those costs and the bill remains stable.

Good years can happen and if claims are less than expected, the group may be eligible for a surplus settlement, provided as a credit for half of the savings. 

For example, let’s say a group’s claims were $200 less than expected for the year. The group may be eligible for a $100 credit toward their next year’s Blue Balanced Funded bill. 

NEW FOR 2026: Surpluses for group contracts effective in 2026 are available only if the group remains covered through Blue Balanced Funded. If they cancel coverage or move to a fully insured plan, they are not eligible for a surplus.

When a group moves to BBF, BCBSTX forecasts what the group’s expected claims costs are for the year. But, we all know that the unexpected can happen and can cost a lot. That’s why stop-loss protection exists.

Stop-loss begins where claims funding ends. If stop loss levels are met, BCBSTX is financially responsible for those claims dollars – not the group.

BBF is level funded and is not a fully insured product. This means that it isn’t subject to the same regulatory requirements as our fully insured plans. For example, BBF does not include Pediatric Dental or Vision benefits.

BBF plans are similar to plans offered today in our Mid Market (51-150) segment.

Groups may offer up to 3 BBF plans.

No, only composite rates are available for BBF plans.

BBF has the same networks as small group, fully insured/ACA plans - Blue Choice PPO and Blue Advantage HMO.

BBF uses the Performance Drug List formulary.

Yes, but dental plans are fully insured. Groups may select composite OR age rates for dental plans.

Yes, vision plans are available for enrollment.

No, state continuation is not available.

PCORI fees are the responsibility of the group. BCBSTX does not currently assist BBF groups with PCORI fee determinations or submissions.

No, 1095 forms are the responsibility of the group.

No, invitro benefits are not available.

No, BBF bills are only available through the Blue Access for Employer portal.

No, BBF bills are only available through the Blue Access for Employer portal.If a BBF group is 30 days past their payment due date, the group will be cancelled and cannot be reinstated. They will need to move to a fully insured plan.

If the group has set up auto pay (highly recommended), drafting happens around the 15th of each month.

While not recommended, we can accept checks. Payment deadlines are strictly enforced, and a group will be cancelled if payment is not received within 30 days of the requested due date. Groups are highly encouraged to setup auto payments through Blue Access for Employers. 

For 2025 effective dates, a group must be a small group employer with at least 10 enrolled employees and a maximum of 50 eligible employees.

NEW FOR 2026: For 2026 effective dates, a group must be a small group employer with at least 5 enrolled employees and a maximum of 50 eligible employees.

Small groups are determined based upon the average number of employees (full-time, part-time, seasonal, etc.) that were employed on business days during the prior calendar year from the effective date of coverage. For example, if you want a BBF plan starting on February 1, 2026, your average employee count would be based on the 2025 calendar year. Your agent can help you with this determination.

No, BBF plans are only available on first of the month effective dates.

Yes, the group must contribute at least 50% of the employee only coverage of the lowest-cost plan offered.

For 2025: The group must enroll a minimum of 10 employees or 75% of eligible employees (whichever is greater).

NEW FOR 2026: The group must enroll a minimum of 5 employees or 75% of eligible employees (whichever is greater).

No, a group must have at least 12 months of prior group coverage to receive a BBF quote.

To qualify for a BBF quote, a group should have good financial history, free of any bankruptcy proceedings for at least 12-months.

No, retiree coverage is not available.