INDUSTRY
SERVICE INDUSTRY
Building better benefits for the backbone
of America’s service industry.
At Memberly, we believe great benefits should reward hard work
The service industry — from home services and cleaning to maintenance, hospitality, and field trades — runs on energy, skill, and physical work. These teams are younger, more active, and healthier than the national average, yet they often pay the same inflated insurance rates as higher-risk populations. Memberly changes that. Our self-funded and level-funded PPO and Reference-Based Pricing (RBP) health plans are designed specifically for service-industry employers. They deliver comprehensive coverage using major PPO networks or RBP platforms — at up to 40% less cost than traditional fully insured plans.
Why Self-Funding Works Better for the Service Industry
In self-funded or level-funded plans, employers pay only for the healthcare their members actually use — not the inflated pooled premiums of big-carrier insurance. For service-industry employers, this model offers major advantages:
- Younger, healthier demographics = fewer claims and lower costs
- Physically active employees drive down utilization compared to office-based workforces
- Transparent PPO or RBP pricing replaces inflated billed rates
- Potential refunds or surplus credits if annual claims come in under projections
Who Memberly’s Health Plans Are Built For
These industries share common traits — mobile workforces, physically active roles, and younger demographics — all of which align perfectly with how self-funded and level-funded health plans are rated and priced.
Memberly’s health plan designs are ideal for:
- Home Services: HVAC, electrical, plumbing, landscaping, and pest control
- Cleaning & Maintenance: Janitorial, floor care, maid services, and facility operations
- Hospitality & Food Service: Restaurants, catering, hotels, and entertainment venues
- Beauty & Wellness: Salons, spas, fitness studios, and personal-care professionals
How Service Industry Employers Save Up to 50%
Traditional insurance blends your low-risk group with high-cost populations. Memberly’s approach customizes your plan and pricing around your workforce.
By combining:
- Self-Funded PPO or RBP design
- Preventive-only MEC coverage for part-time staff
- MVP (Minimum Value Plan) options for full-time employees
- Integrated pharmacy and telehealth savings
Service employers typically reduce total premium spend by 30–40%.
Get Your Industry Health Plan Strategy
Self-Funded PPO Plans
Self-Funded PPO Plan:
In a self-funded PPO plan, the employer assumes the financial risk of paying employee healthcare claims directly. Stop-loss insurance is purchased to protect against higher-than-expected claims. A third-party administrator (TPA) manages claims, member support, and access to a national PPO network (such as Aetna, Cigna, UnitedHealthcare, or Blue Cross Blue Shield).
When claims are lower than projected, the employer retains the savings. In level-funded arrangements, up to 100% of unused claim funds—also called margin—can be refunded to the employer.
Fully Insured PPO Plan:
In a fully insured PPO plan, the employer pays a fixed monthly premium to an insurance carrier. The insurer assumes all claims risk and handles plan administration. There’s no opportunity to recover unused funds.
Employers access national PPO networks by partnering with a third-party administrator (TPA) that holds leasing agreements with major carriers. This provides employees with broad in-network provider access while allowing employers full control over plan design and funding.
A TPA is a vital partner in a self-funded plan. Their responsibilities include:
• Processing and paying claims
• Providing access to PPO networks
• Offering member support and customer service
• Ensuring compliance with federal and state regulations
• Coordinating with stop-loss insurance carriers
• Delivering detailed reporting and analytics to employers
• Providing a member portal to view claims, access benefits, and retrieve digital ID cards
• Offering an employer portal for real-time tracking of plan usage, financial data, and performance
• Broad Access: Access to large national networks with thousands of providers
• Discounted Rates: Pre-negotiated PPO discounts reduce claims costs
• Flexible Design: Employers can customize deductibles, copays, and covered services
• Brand Recognition: Familiar provider networks like Aetna, Cigna, UHC, and BCBS
• Higher Costs: Compared to reference-based pricing (RBP), narrow networks, or direct contracting
• Access Fees: PPO leasing includes per-employee-per-month (PEPM) fees
• Limited Rate Control: Employers must accept the PPO’s set pricing and repricing methods
• Balance Billing Risk: If out-of-network services are allowed, providers may bill members above allowed charges
Yes. Especially for larger or multi-location employers, combining multiple PPO networks can help:
• Expand geographic coverage
• Provide different options by region or division
• Offer backup or secondary networks
Employers protect themselves with stop-loss insurance, which limits financial exposure. Stop-loss insurance includes:
• Specific Stop-Loss: Caps liability per individual
• Aggregate Stop-Loss: Caps total claims for the entire group during a plan year
This coverage ensures protection from catastrophic or unusually high-cost claims.
Yes. One of the key advantages of a PPO is out-of-network access. However:
• Out-of-network care typically costs more due to higher deductibles and coinsurance
• Members may face balance billing, where the provider charges above the PPO’s allowed amount
Employers can manage and reduce healthcare costs by:
• Negotiating better PPO access terms with the TPA or carrier
• Encouraging employees to use in-network providers
• Implementing reference-based pricing for specific services
• Offering wellness and disease management programs to improve long-term health outcomes and lower claims
Level Funding a Self-Funded Plan
Level funding is a type of self-funded health plan where the employer pays a fixed monthly contribution that covers the cost of claims, administrative fees, and stop-loss insurance. This fixed amount is determined based on expected claims and administrative costs, and if claims are lower than expected, the employer may receive a refund or credit for the surplus.
Traditional self-funding involves an employer paying for actual medical claims on an ongoing basis, without a fixed contribution. The employer assumes the risk for the claims and can have significant fluctuations in monthly costs. In contrast, level funding offers more predictability with fixed monthly payments, reducing the volatility associated with claims in traditional self-funded plans.
Surplus claims funding refers to the difference between the amount the employer contributed to the plan (in the form of monthly premiums) and the actual claims costs that were incurred. If claims are lower than expected, the surplus may be refunded to the employer or credited toward future plan contributions. This is one of the advantages of level funding.
Surplus claims funding is typically returned to the employer after all claims are settled for the plan year or contract period. The specific timing may vary depending on the TPA’s terms and level funding arrangement. Some plans may return 100%of the surplus, while others may return less such as 50% in the form of a credit toward the next year’s funding or keep it as a reserve for future claims.
Level-funded plans offer the employer the ability to take on a portion of the risk but provide more predictability than traditional self-funding. The employer is still responsible for claims costs but is protected from catastrophic claims through stop-loss insurance. The fixed monthly contribution helps smooth out the risk, making it easier to budget for healthcare costs.
If claims exceed the expected amount in a level-funded plan, the employer is responsible for covering those additional costs—up to the plan’s maximum claims limit. Once that limit is reached, stop-loss insurance kicks in. This coverage protects the employer by reimbursing claims that exceed the maximum funding threshold, limiting the employer’s financial exposure to large or unexpected medical expenses.
Fixed monthly contributions in a level-funded plan are based on factors such as the employer's size, employee health risk, historical claims data, administrative costs, and stop-loss premiums. These contributions are designed to cover expected claims, administrative fees, and stop-loss protection, ensuring the employer has a predictable monthly expense.
Level funding provides several benefits for employers, including:
- Predictable monthly costs for budgeting purposes.
- Protection from high claims costs through stop-loss insurance.
- Surplus refund potential if claims are lower than expected.
- Greater flexibility and control over plan design compared to fully insured options.
- Transparency into claims data and cost management opportunities.
Yes, level funding is particularly attractive for small and medium-sized businesses that want the benefits of self-funding but may not have the resources or risk tolerance for traditional self-funding. Level funding offers a more predictable and manageable way for smaller employers to assume some risk without the volatility of traditional self-funding.
When funding a level-funded plan to the maximum, employers are essentially pre-funding their plan based on expected claims, stop-loss coverage, and administrative costs. To fund a plan to the max means ensuring that the monthly contributions cover all anticipated costs, including potential catastrophic claims. Employers can work with Memberly and our stop-loss carriers to estimate claims as accurately as possible and add a buffer for higher-than-expected expenses. The level of stop-loss protection (specific or aggregate) plays a key role in determining how much funding is needed to be “funded to the max”. By funding the plan to its maximum level, employers eliminate the risk of underfunding and ensure that the plan operates without further claims exposure while also optimizing the chances of receiving a surplus refund if actual claims are lower than projected maximum.
Sourcing Stop-Loss Insurance
Stop-loss insurance protects employers from excessive claims by setting a predetermined threshold, after which the insurance carrier covers claims. This is important for self-funded plans because it helps mitigate the financial risk of unexpectedly high medical costs.
Memberly partners with a network of reputable stop-loss carriers, offering customized solutions based on the employer’s specific plan design, risk tolerance, and funding requirements. Memberly sources stop-loss options that are competitive and tailored to each employer’s needs.
Memberly sources two main types of stop-loss insurance:
- Individual Stop-Loss (ISL): Covers claims for individual employees once medical costs exceed a specific amount.
- Aggregate Stop-Loss (ASL): Protects the entire plan if total claims exceed a set amount for the plan year.
Memberly conducts a detailed actuarial analysis based on historical claims data, plan design, and the employer’s risk profile to determine the most appropriate stop-loss coverage. Memberly then provide options for both individual and aggregate stop-loss policies.
Yes, Memberly partners with leading stop-loss insurance providers known for their reliability and flexibility. These carriers are selected based on their ability to offer competitive pricing, strong service, and comprehensive coverage options.
Yes, Memberly sources stop-loss insurance for employers of all sizes, from small businesses to large enterprises. Memberly’s tailored approach ensures that the stop-loss coverage is suitable for the employer’s workforce size and healthcare risk.
By leveraging its partnerships with multiple stop-loss carriers, Memberly is able to negotiate competitive offersfor employers. Memberly’srisk management strategies and in-depth knowledge of the market help reduce overall costs.
The process typically involves underwriting analysis, where Memberly collects claims data and evaluates the employer’s needs. Based on this analysis, Memberly presents customized stop-loss options and assists the employer in selecting the best policy for their plan.
Yes, Memberly provides ongoing support and guidance during the stop-loss renewal process, helping employers reassess their stop-loss coverage, adjust their policies based on claims trends, and explore better pricing or policy options each year.
Memberly strategically partners with high-quality, cost-effective medical networks to help lower the overall risk of the self-funded health plan. By using direct contracting with medical providers, including PPO and narrow networks, Memberly helps employers negotiate lower fees and reduce claim volumes, which in turn reduces the exposure to stop-loss claims. This strategic alignment can lead to significant savings on stop-loss premiums.
