Medical Stop Loss Captives are a growing market phenomenon catching the attention of small to medium size plan sponsors. A Captive can be structured to meet the specific needs and goals of like minded member employers.
What Is A Captive?
A health insurance Captive is a method for taking risk. The strategy is designed to remove or mitigate the typical risk and volatility associated with large claims. By acting as a “shock absorber” for large claims a Captive leaves employers with their own smaller claims which they can effectively control. Lasers are no longer a material risk borne by individual member firms participating in a Captive.
A Group Captive can be made up of companies in the same industry or different industries and are ideal for organizations with 100 to 1,000 employees.
The organization should be financially stable, and its leadership should be willing to embrace innovative risk management strategies.
How Popular Are Health Insurance Captives?
Captive Intelligence reports “It’s not unreasonable to project group captives accounting for more than 25% of the total medical stop-loss market within the next few years………………………. research suggests group Medical Stop Loss captives currently represent more than $5bn of the overall $27bn MSL market, with significant growth expected to continue in this space”
New Age Captive Opportunity Is Now
Market timing towards establishing a unique Captive arrangement for like minded self-insured plan sponsors adopting certain proven risk management strategies could not be better.
New Age Strategies include:
- Direct Primary Care
- Cash Centric Point-of-Service Claim Adjudication
- Elimination or Reduction of Third Party Interference
- Plan-Managed Referrals
- Reference Based Pricing – Cost Plus Wrap
- Elimination of Traditional Managed Care Networks
- Compassionate Care Plan™ Risk Transfer
- IRC 105r
- Specialty Drug Risk Transfer
White Flag Plan Sponsors are not candidates for a Captive arrangement incorporating these strategies.
These proven strategies will reduce or eliminate medical trend providing plan sponsors with static multi-year rate stability while improving benefits at the same time. Plan sponsors can expect savings of 40-50% as others have realized with good success since 2007.
This New Age Captive, composed of a select group of like minded plan sponsors adopting proven risk management strategies developed over the last 15 years by early adopters, will out perform traditional medical stop loss insurance by a margin of 2 to 1 or more.