In a time marked by escalating costs and increased market competition, American businesses are looking to reduce expenses wherever possible, particularly within their healthcare spend.
But with conventional plans, you run into a Catch-22 where a reduction in costs typically results in a corresponding drop in the quality and availability of care.
This dilemma is precisely what the InCap® Group Captive insurance program was designed to alleviate. And, today, more than 400 companies across the country have scrapped the traditional fixed premium model for the Hilb Group Company captive solution.
Here’s how and why.
What Is Captive Insurance?
Captives are an alternative risk management strategy in which employers congregate to create and own an insurance company to insure their own risk.
Under a traditional model, a third-party company creates and controls the employee’s health insurance plan, charges a premium, and requires the insured companies to pay a deductible. Premiums are pooled, and if a covered risk is incurred, the policy will provide at least partial coverage.
But these policies tend to be rigid in their coverage, lack customizability, and offer zero incentive structures for the insured companies to improve their risk and health moderation.
Once fees are paid, that money is gone, whether they only utilized 10% of their coverage or all of it. This is why companies are increasingly favoring captive policies. They empower businesses to:
- Control their risk management
- Create customized converge tailored to their needs or risks
- Enjoy cost savings since premiums and underwriting profits are paid to the captive and split amongst participants
Advantages of the InCap® Solution.
Not all group captives are made equal.
Most solutions will transfer fiduciary responsibility to the group, which can pose a serious risk. As Sean Schantzen, Senior Risk Practice Leader of Big 4 Accounting Firm, writes: “ERISA Fiduciary Risk is the largest undisclosed risk I’ve seen in my career.”
But the InCap® solution isn’t just an ordinary, run-of-the-mill, captive program.
InCap® is for mid-sized groups, ranging between 50-2000 participants. It was designed to mitigate assumed fiduciary risks by having the third-party administration (TPA) system assume the fiduciary responsibility on your behalf.
Once joined, a plan participant can take control of their benefit plan design. The average plan runs below 25% of the national TPA medical loss ratio, and the typical member can expect to save between 12%–15% on costs in the first year alone.
What are the key differentiators that make InCap® stand out?
- Concierge Care – Assigned medical practitioners partner with each member, providing expertise and guidance to help navigate the healthcare system for optimized results.
- Southern Scripts partnership – This relationship allows us to create a pass-through of manufacturer rebates on medications back to the clients—$2.6+ Million to date.
- Claims scrubbing – Our goal is to certify that only viable claims are processed. In 2021, we identified 25% of claims with waste, overcharges, double billings, and errors, resulting in massive savings for the owner-insureds.
- Full transparency – We hold quarterly meetings for clients to review their direct data and make adjustments to controllable plan elements.
- Program structure – Our programs include COBRA, HR Resources, compliance, and benefits administration.
- Plan date anniversary flexibility – This increased plan elasticity improves staff renewals.
- Immediate profit sharing – Plan participants can expect an above-average rate of return. Our most recent profit share was $5.4 million.
There have been countless success stories from our more than 400 members. For instance, one of our participants enrolled a decade ago with 235 participants spread throughout the country. Since enrolling, they have saved $7.2 million and received more than $1 million in profit sharing.
The Hilb Group Company InCap® Solution
Group captives are the answer to the quicksilver, uber-competitive healthcare environment. They provide the flexibility, dynamism, and control modern companies require from their health benefits plans.
At Clark & Lavey, a Hilb Group Company, we designed the InCap® Solution to replace the traditional insurance plan. And, by joining us, you can reduce your premiums, risks, and tax payments.
Ready to start saving? Join InCap today.