Medical Insurance Captive Overview

With the ever increasing cost of healthcare, employers are looking for ways to effectively manage these medical insurance costs, one of their largest expenses, next to employer payroll.

Group Purchasing Programs

Large employers have self-insured their plans for years, allowing them to gain control of their medical insurance expenses by gaining transparency of the costs associated with the provided care. These programs allow employers to retain carrier profit, have control over the benefits, eliminate state premium taxes, and tie the expenses to the same plan year that expenses were incurred. Smaller employers have traditionally not been able to take advantage of self-insurance due to volatility of claims/risk and lack of credibility of the claims.

New Opportunities for Small Businesses

Now there is a way for smaller employers to have the same advantages as large firms without the risks traditionally associated with self-insured plans. Through an Employee Benefits Group Insurance Captive, a smaller employer can take advantage of the economies of scale, 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 these economies of scale by sharing risk through a shared risk pool of their dollars called a Captive.

Captives are risk funding mechanisms that allow an insured company to establish its own insurance programs. By using a captive, a company can reduce the premiums paid to commercial insurance carriers and recapture part of these premiums as savings.

Captives are special purpose entities which allow businesses to better control their total cost of risk. When diligently operated, a captive insurance company can yield many benefits for businesses, including formation of policies for existing uninsured risks, retention and investment of underwriting profits, reduction of insurance expenses, and more.

Making a Captive Work for Your Business

Our team will work directly with organizations to develop a tailored solution to help it achieve these benefits. We pride ourselves on our multidisciplinary approach to create, implement, and manage a captive for our clients.

It takes a trusted advisor to navigate the captive and reinsurance marketplace. Our clients thrive from our technical knowledge and transactional experience, as well as our enduring relationships with outside service providers. These service providers include attorneys, CPAs, actuaries, and bankers, all well-versed in the captive arena. Our relationships, combined with our internal insurance accounting and captive tax treatment expertise, make us an ideal partner for you.