Captive insurance programs help businesses gain control and transparency with self insured health plans.
They enable employers to provide high-quality healthcare without having to navigate commercial insurance companies’ rate increases and profit retention. Instead, with Hilb’s InCap® solution, companies that have robust risk management policies and a strong claims history can enjoy significant underwriting profits — InCap members have saved approximately $71 Million in total claims cost savings since inception.
Is There an Added Risk in Captive Health Plans?
The captive structure, including external stop-loss, pooled risk, and individual member funding (self-insured retention) provides protection for 100% of the risk. Clark & Lavey works with each member organization to determine their risk tolerance and provides protection to minimize it.
Are There Other Products that can Help Our Company’s Employees?
Yes, we have an array of strategic partners including innovative Pharmacy Benefit Managers. A PBM is a company that administers the drug benefit program for your insurance plan. More importantly, they directly affect the costs of your prescription medication for the better.
How Will I Understand the Reports Than I will Now Be Responsible For?
Having control of your benefits plans can be rewarding for you and your company’s employees. The data extrapolated from Hilb’s captive insurance program, InCap®, can help you understand your employees’ needs and tailor your plan accordingly. You can also apply those insights by integrating wellness programs that can improve your employees’ overall health and, subsequently, reduce costs. Your Benefits Advisor will compile all the data for you and present it. We work hard to make the information accessible and applicable so you can pull the right levers. Additionally, our experts help guide Finance teams, so they work symbiotically.
Will Captive Insurance Require More Work for me and my Team?
Most CFO professionals we work with found that the first year was the most time-consuming. Like learning anything new, it takes time, but that is why our Benefits Advisors and CFO Practice Leaders are available to assist you. Moreover, after the first year, most found that time spent tailoring their company’s benefits plans or reviewing the data became a part of their average routine.
Will Self Funded Health Plans Impact the Quality of my Benefits?
No, most employers can transition to the same insurance carrier they had before. Additionally, our cost-containment strategies and wellness programs strengthen the quality of employee benefits. For example, through wellness partners who are nationally recognized many have seen a significant reduction in their Medical Loss Ratio (MLR), effectively lowering their claims experience, and ultimately their health premium costs. Which in turn, means healthier and happier employees. Also, our plan includes telehealth which significantly improves an employee’s accessibility to physical and mental healthcare. Our HR Practice Leader is also available to guide you in enhancing your employee benefits.
Why Switch to a Group Captive?
The insurance industry frequently experiences “hard” and “soft” cycles, during which time premium changes are mostly unrelated to specific loss experiences. By collaborating with other successful, like-minded businesses to establish your own group captive insurance firm, you may avoid these fluctuations and increase the predictability and stability of your costs. By doing this, you can cut expenses and generate investment income—two advantages you wouldn’t get from a conventional insurance provider.
What is Unique About Hilb’s InCap® Group Captive Plan?
InCap®, Hilb’s self-funded group captive model provides businesses with premiums based on their actual loss histories, a wide range of risk control and safety services catered to their particular needs, chances to get more involved in claims management, and special coverage types not offered in the traditional insurance market.
What are the main differences from captive insurance vs. traditional insurance?
Are you looking for the best health insurance plan for your business and its employees?
While you could shop around for traditional policies, a growing number of companies have turned to an alternative insurance policy that seeks to bypass and disrupt the corporate insurance market.
We speak, of course, about captive insurance. If you want to know how captive insurance stacks up against traditional group health plans, this guide is for you.
Difference #1 — Who’s in Charge of the Plan
With a traditional insurance plan, a third-party company creates and controls the employee health insurance plan. They charge a premium and require that companies pay a deductible.
Those premiums pool with premiums from various other parties and their insured risks. If a covered risk is incurred, the insurance will at least partially cover the claim.
With a captive insurance plan, the insurance company is controlled and owned by its insureds. Typically, it will either be created as a subsidiary of the company, or several unrelated companies may join a group health captive insurance program to disburse the risk. In either case, the captive program acts like a traditional policy by:
- Issuing policies
- Processing claims
- Abiding by regulations and compliance requirements
- Filing income tax returns
- Creating profits
Difference #2 — Ease of Getting Started
Traditional insurance has low start-up costs since there are no formation fees, legal fees, or capitalization requirements. You simply shop around for the ideal policy from an already established entity. Then, once purchased, companies don’t need to worry about the daily operations of the insurance company.
Captives are more hands-on. Because they’re tailored toward a business and its specific risks, they often take longer to set up. In addition, there may be increased initial fees and funding requirements. That said, joining a group captive plan mitigates many of these early costs.
Difference #3 — Risk and Reward
With a traditional insurance plan, the insurance carrier takes on all of the risks. Insurance companies calculate the probability of risk according to the large pool of insured risks in order to set a premium price. As a result, they and their shareholders retain all of the profits no matter the number of claims (or lack thereof).
Additionally, premiums can increase because of historic loss or increased perceived risk.
Herein lies the most significant difference between traditional insurance vs captive insurance.
With self-insured plans, the owners of the captive company can decide whether or not to reserve or distribute the company’s profits. In exchange for the additional risk, you have the potential reward of:
- Reduced costs
- Underwriting profits
- Investment incomes
This is especially advantageous for companies that have strong risk management policies and a positive claims history. Businesses that are able to control their losses are financially rewarded.
Difference #4 — Customization and Flexibility
Traditional insurance plans are designed to cover as many people as possible. But these plans tend to be generic, and their coverage can be limited to only certain types of risk.
On the other hand, captive insurance provides increased flexibility and customization. As the self-insured, you have more control over the coverage design. You can select the terms and tailor the benefits to align with your company’s specific business risks and employee needs.
According to Captive Insurance Times, the top three most prioritized emerging risks include:
- Business interruption following a cyber event
- Loss of reputational value
- Failure of operational resilience
Captive Insurance Solution with Clark & Lavey
Captives are an attractive alternative to traditional, fully-insured health insurance plans. With a captive group program, premiums aren’t fixed and profits can be distributed to member companies.
So, if you’re searching for a plan that lets you control your benefits design, avoid unanticipated rate increases, and retention of underwriting profit and investment income, contact Clark & Lavey to get started. InCap provides low premium costs for both employers and employees.
Are you ready to ditch traditional insurance plans for a modern solution?