Captive Health Insurance
Group Medical Captives: An Overview
What is a Group Medical Captive?
Some employers use self-funding insurance as coverage for the costs of their employees’ healthcare. A good option to consider in conjunction with a self-funded health insurance plan is a group medical captive, sometimes referred to as a stop-loss captive.
A captive medical insurance policy is not considered insurance in a traditional sense like a fully-insured policy typically offered by well-known insurance carriers such as Blue Cross and Blue Shield. Instead, it is a financing strategy that for self-insured employers that need protection against unpredictable healthcare claims.
The catastrophic stop-loss coverage provided by captive insurance companies is an alternative to more commonly purchased self-funded plans because they are using the law of large numbers to reduce employer claims exposure. Captive insurance companies often come with more costs but less risk. However, on the other hand, self-funded insurance outside of a captive insurance company might be less costly, but with more risks.
How Does a Medical Captive Work?
- Employer A, located in Logan, Utah has 110 employees has a $2,500 calendar year deductible using the Wise PPO network. They purchase Sterling Urgent Care memberships for their employees.
- Employer B, located in Idaho Falls, Idaho has 30 employees and a $6,500 calendar year deductible and uses the Cigna PPO network. They purchase Sterling Urgent Care memberships for their employees.
- Employer C, located in Hailey, Idaho has 65 employees, with a $3,000 calendar year deductible and uses referenced based pricing. They purchase Sterling Urgent Care memberships for their employees.
Get More Information on Group Medical Captives
If you are a business owner, you should consider all the available financing options for your company’s employee benefits from fully-insured and level-funded policies to self-funded and captive insurance. Fully-insured policies work well for those companies who want a traditional approach to employer-funded healthcare.
Employers created captive insurance companies for the added advantages to self-funded employers. Group medical captives enable employers to pay for lessor claims themselves and have a large insurance company cover catastrophic claims. You might like the idea of group medical captives if your goal is to improve transparency and control.
For more information regarding group medical captives and how they can benefit your company, contact Sterling Insurance Agency.