September 24, 2026
Alternative Funding Health Plans
Employers today have more options of group health plans than just comparing “fully-insured” vs. “self-funding”. “Alternative funded” plans can (depending on the circumstances) provide greater cost transparency, more flexibility and possibly lower costs but also come with limitations/exclusions, risks and additional administrative, compliance and reporting work. “Alternative funded” plans are not a single type of health plan but rather can vary in design, strategies, risk, how healthcare is purchased, and employer funding. The right (or wrong) approach depends on the employer’s size, risk tolerance, workforce culture, location, cash flow, and appetite for “thinking outside of the box”. Below are some examples of different “Alternative funded” approaches:
- Level Funding — Level-funded plans are a hybrid of fully-insured and self-funded coverage. This funding model can provide more transparency and flexibility than traditional fully-insured coverage without the same month-to-month volatility as conventional self-funding. The employer pays a fixed monthly amount that, behind the scenes, is divided into two buckets: administrative plus stop-loss costs and claims funding. When actual claims exceed the carrier’s projections, the employer is protected by the stop-loss limit. However, if the carrier spends less on claims than projected, a surplus is shared with the employer. Traditional insurance carriers can offer variations of this approach as well as newer companies such as Gravie, Angle Health, Optimyl, Zuniga and Sana (to name just a few).
- CHOICE (formerly referred to as an ICHRA) — A CHOICE (Custom Health Option and Individual Care Expense Arrangement) is the rebranded name for an ICHRA. A CHOICE takes a different approach than offering a group health plan. Rather, the employer provides employees with a defined amount of money to purchase individual health insurance. This gives the employer greater control over its contribution while allowing employees to select coverage that fits their individual needs. Most employers will use a vendor to help employees understand their options. Some CHOICE vendors include Gravie, TakeCommand, Zizzlhealth and eHealth (to name just a few).
- Value-Based and Navigation-Enhanced Models — Another approach keeps an underlying medical plan in place but uses a program to encourage employees to obtain care from higher-quality or more cost-effective providers. These programs may use Medical Expense Reimbursement Arrangements, or financial incentives to “steer” members toward more cost-effective providers. Rather than serving as a standalone funding method, it can complement a self-funded, level-funded, or other employer-sponsored medical plan. Programs like Garner, UHC’s “Surest” and BCBS of IL’s “Easify Edge” are just some familiar names in this space.
Absence/Leave Management Resource
Managing employee leave has become increasingly complex. Between state paid family and medical leave (PFML) programs, federal requirements like FMLA, ADA, and PWFA, and the coordination of those programs with disability and employer-paid leave policies, there are more moving parts than ever.
Stumm Insurance, LLC is proud to offer our clients complimentary access to Absence/Leave consulting services through our partnership with Centro Benefits. Centro Benefits offers a dedicated Absence/Leave Management consulting team specializing in absence administration and leave management to provide guidance to you in areas such as:
- State PFML program requirements, including new and upcoming programs
- Coordination between state programs, short-term disability, and internal leave policies
- Leave policy and handbook review
- Leave administration and vendor evaluation
- Overall leave strategy aligned with your workforce and locations
Website: Absence Management Consulting | CENTRO Benefits Research
Absence Insights blog: Insights | CENTRO Benefits Research
This valuable service is complimentary for Stumm Insurance, LLC clients. If you’re interested in learning more about how Centro Benefits can support you with your Absence/Leave Management needs, please reach out to your Stumm Insurance Service Team.
ACA Affordability Threshold Change for 2027
The IRS has announced that employer-sponsored health coverage will satisfy the ACA “affordability test” for Applicable Large Employers (ALEs) in the 2027 year if the employer offers a Single coverage option that does not exceed 10.22% of an employee’s household income, which is an increase to the 2026 rate of 9.96%. To put the new 2027 number in perspective, for a $15/hour worker who works 30 hours a week, an applicable large employer may be penalized under the affordability test if they are charging more than ~$199 per month in 2027 for their least expensive single medical plan (previously ~$194 per month in 2026). If you need help making sure your medical plan meets these requirements now or in the new year, please reach out to your Stumm Insurance Service Team.
2027 HSA/FSA/Commuter Contribution Limits
The Internal Revenue Service (IRS) has announced updated contribution limits for Health Savings Accounts (HSAs) for 2027. For 2027, the annual HSA contribution limit increases to $4,500 for individuals with self-only coverage and $9,000 for individuals with family coverage, up from $4,400 and $8,750, respectively, in 2026. The additional HSA catch-up contribution for individuals age 55 and older remains $1,000.
As of this publish date, the limits for Flexible Spending Account (FSA) and commuter benefits are pending. The 2027 annual employee contribution limit for a Health Care FSA is projected to be $3,500, and the maximum permitted carryover increasing to $700 for plans that allow carryovers. The Dependent Care FSA limit will remain at $7,500 ($3,750 for married individuals filing separately). For employers offering Commuter Benefits, the monthly pre-tax contribution limit is projected to be $350 for qualified transportation benefits, up from $340 in 2026. The qualified parking limit is also projected to be $350 per month.
Plan Ahead: If your organization offers HSA, FSA, Dependent Care FSA, or Commuter Benefits, now is a good time to review your plan limits and prepare for upcoming plan-year changes.
Please work with your Stumm Insurance Service Team to review your plans and make any necessary adjustments.
Upcoming Holidays
Please note that Stumm Insurance is “closed” on certain Holidays throughout the year. Your Stumm Insurance Service Team will not be readily available on these dates during this 4th quarter:
- November 26, 2026 & November 27, 2026 — Thanksgiving
- December 24, 2026 & December 25, 2026 — Christmas
- December 31, 2026 & January 1, 2027 — New Year