The Funding Model Scorecard for Employers
New City Insurance frames this issue in a useful way. New City Insurance compares the three funding models for employers.
For employers, the value is not the definition. The value is what the definition changes before the company signs another renewal.
A scorecard gives leadership a way to compare models on the same terms: cost, risk, control, data, service, and accountability.
Why This Matters To The Business
Three proposals arrive in three formats. The prettiest deck wins. That is not procurement. That is theater.
That moment shows the real problem. The plan may be expensive, but the bigger issue is often that nobody can explain the machinery underneath it.
For the CEO, this connects to margin, hiring, retention, and risk. Ask for a decision tool, not just a recommendation.
For the CFO, this connects to cash flow and control. Give each model a score for expected cost, worst-case cost, data access, vendor transparency, and employee disruption.
The Practical Review
Put the current plan, contract, or renewal proposal on the table. Then ask:
- What is the expected cost, worst-case cost, and exit cost?
- Who keeps savings when claims run better than expected?
- What data do you get each month without begging for it?
Do not accept a vague answer. Do not accept a slide that looks good but leaves the decision unclear. Ask for the document, the number, and the person who owns the next step.
What Good Looks Like
A clean review does not start with premium. It starts with a map. Fully insured, level-funded, and self-funded are not just labels. They are different deals about risk, data, cash flow, and control.
The simple test is this: can leadership see expected cost, bad-year cost, data rights, surplus rules, and vendor compensation on one page? If not, the company is comparing feelings instead of facts.
What I would want in the file:
- A one-page model comparison
- Expected cost and worst-case cost
- Data rights, surplus rules, and exit terms
That file does two jobs. It helps leadership make a better decision now. It also creates a record that shows the company acted with care later.
This is the gap I see most often. The employer may have a smart person in HR, a broker presentation, and a spreadsheet. But nobody has a clean decision file. When pressure hits, the company has memories instead of proof.
For this article, the pressure point is not education. It is timing. New City Insurance gives leadership enough context to ask better questions before the vendor meeting controls the frame. The line I would underline is this: The prettiest deck should not win the renewal.
What To Do Before Renewal
Create a one-page funding scorecard and require every proposal to fit it.
This is where proactive strategy beats reactive shopping. Renewal season should not be the first time leadership sees the risk. It should be the point where a prepared team confirms the path.
The Warning Sign
If proposals cannot be compared side by side, someone benefits from the confusion.
That warning sign is not small. It tells you whether the plan is governed or merely renewed.
Save this line: The prettiest deck should not win the renewal.
The rules are changing. The exposure is real. The opportunity is massive for employers that move early.
Book 15 minutes at www.Paul.Health if you want this reviewed against your current plan.