Medical Insurance Captive Overview

With the ever increasing cost of healthcare, employers are looking for a way to effectively manage the costs associated with one of their largest expenses, next to employer payroll. Additionally, with the new taxation laws associated with the ACA, there is ever increasing pressure to manage these escalating costs. Large employers have self-insured their plans for years, self-insuring your medical insurance program allows you to gain control of your medical insurance expenses by providing transparency of the costs associated with the care that is being provided. This allows employers to retain carrier profit, have control over the benefits that are provided, eliminate state premium taxes, and allow the expenses under the plan be applicable to the same plan year that expenses were incurred. Smaller employers have standardly not been able to take advantage of self-insuring as large employers have due to volatility of claims/risk and lack of credibility of the claims.

Now there is a way for smaller employers to have the same advantages as large employers through self-insuring their program without the risk traditionally associated with self-insured plans. Through an Employee Benefits Group Insurance Captive, an employer can take advantage of the economies of scale that large employers have, gain control of their program, improve transparency, retain carrier profit, and lower their tax liability under the ACA without taking on the risk. A group insurance captive is a group of employers that come together to gain the economies of scale that large employers have, by sharing risk through a shared risk pool of their dollars called a Captive.