Funding Stop Loss Cover Through A Captive

Stop loss insurance is not a value added product. It is a commodity.

Layered financials, one on top of the other, add to the costs. Renewals are largely pooled, and trend can always be counted on to affect a Plan’s financial health. Cost containment efforts by embattled employers center around bidding out cover every year. May the lowest bid win, is the mantra.

Changing cover in the stop loss world, year after year, is risky. The amount of risk varies, according to contract language which differs from one policy to the next.

Is there a better way for a self-funded plan to identify risk and financially account for it with savings in the long run?

A group captive seems a viable solution. Not complicated, easy to set up, and cost effective in the long term. Multiple employers can participate in a captive and share underwriting profits and losses.