Captive Insurance: What It Is and How it Works

Employee health insurance is very important but can be very expensive. With a traditional, fully insured plan, you must pay a fixed premium for the insurance company to assume risk of any claims. This means that your insurance carrier gets to keep the money that is not spent every year. However, you will incur massive increases at renewal if there are many claims on your plan. This may seem like a lose-lose scenario, and in many cases, it is! But, don’t worry; there is another option. You may be able to save significantly on health premium costs with a medical captive insurance program.

Captive insurance is a health insurance program that provides coverage for, and is controlled by, its owners. Captive programs can be formed by groups of companies and associations of similar types, such as schools, non-profit organizations, retailers, restaurants, or manufacturers. Or, they can be formed by companies that have nothing in common except a desire to save money. Think of a captive insurance program like a credit union, where companies pool the risk and share the benefits!

Captive insurance can be a great fit for a wide array of organizations. Generally, captives are designed to control health insurance costs for mid-sized companies. They can serve just about every market segment, including non-profits and associations. When you establish a captive program, you are in complete control of your insurance. You have the power to manage and control costs, cash flow, claims, and risk.

A group health captive program is the best opportunity for a mid-sized group (50 – 1,000+) to truly impact employee benefit costs, without sacrificing the quality of their employee benefits program. We have seen companies that are fully-funded on a premium basis realize savings of 12% – 15% in the first year alone!

The potential for cost savings are exciting, but it is important to note that captive success is often determined by the structure of the program and the captive manager. If you are considering captive insurance, you’ll need an experienced partner to recommend the right fit. That’s why we’re here.

Offered exclusively by Clark & Lavey, InCap® is a Group Captive program that delivers significant savings! If your company employs more than 50 people and you’re considering captive insurance, this could be the solution you have been looking for. InCap® offers you the following advantages:

• Total control of your plan’s benefit design
• Avoid unanticipated rate increases
• Data, cost, and communications transparency
• No burdensome plan negotiation and marketing
• Pool claims to control volatility and cash flow
• Retain underwriting profit and investment income

Now, fill out the form below to explore more about captive insurance. You will instantly receive a free download of the Top Ten Questions to Ask About Captive Insurance. Or, please contact us to schedule a call. We look forward to helping you on your captive journey.