Have you been hearing about medical captives for benefit plans, but not sure what it all means? A captive takes advantage of the economies of scale and negotiating strengths inherent in a large census to reduce insurance premiums, lower risk profiles, and optimize tax savings. An added benefit of captives is the distribution of potential underwriting and investment profits. In short, a captive plan puts the employer in control of employee benefits.
A captive can serve almost every market segment, including associations and non-profit organizations. In fact, a non-profit client of Clark & Lavey has seen extraordinary savings over the past several years. Here is their story of captive success.
This client is a non-profit organization that has been in operation for nearly 40 years and serves families and individuals with developmental disabilities. Like many others, this client depends on a robust benefit program that requires low employee contribution to help improve employee retention. Prior to joining InCap®, Clark & Lavey’s captive program, the client utilized a fully-insured premium program for its 200 employees. Each year with their fully-insured program, the organization endured significant increases and had little way to control their health care spending.
The client joined InCap® in 2013. Soon, they were realizing significant savings. To date, this organization has seen $907,333 in total savings. Here’s a breakdown of their cost savings, year over year:
You may be wondering why their savings in 2018 was so much lower than years previous. In 2018, the organization had several exceptionally high claimants, which explains the decrease in savings. If they had not been an InCap® client, they would not have received the $26,813 in 2018 and their renewal premium would easily have been more than 20%. They most likely would have had to change their contribution structure or plan offering to absorb the significantly higher costs. By participating in the Captive, their risk was mitigated due to the high number of participants in the Captive pool. They also did not experience those large cost increases that would have forced them to make some changes.
If you are interested in experiencing cost savings like this and want to learn more about the InCap Solution, contact us today! Our knowledgeable and experienced professionals are standing by to assist you.