Benefits Stop-Loss Captive: A New Solution for Medium-Sized Employers

Discover Reduced Costs and Increased Control

Employers today have more insurance options than traditional plans – including employee benefit group captives. Group captives allow like-minded employers with 100 to 500 employees to form and manage their own insurance entity. The result is reduced costs and increased control of employee benefits.

Conner Strong & Buckelew partners with Pareto Captive Services to offer unique access to this innovative and contemporary benefits stop-loss captive solution.

How Employee Benefit Group Captives Work

When employee claims are modest, your organization saves a portion of the profit typically kept by insurance carriers. When claims are extensive, your group captive absorbs the shock. Individual players in the partnership assume the following roles:

Cost Comparison: Group Captive vs. Traditional Insurance

Minimum expenses for claims and overhead could be as low as 15 percent of what you would pay a traditional insurance carrier – in the unlikely scenario of no claims. Conversely, the maximum exposure could be as high as 120 percent of the cost with a traditional carrier. Typically, your exposure will fall in the middle.

Who Benefits From Employee Benefit Group Captives?

The employer. Employee group captives are created by employers, for employers. Your return on investments may include:

• Short-term savings: You retain profits when claims are low and benefit from decreased state taxes, reduced or eliminated state mandated coverages and risk selection
• Long-term savings: You save with manuscript plan design, including employee incentives for positive behavioral changes; value-based benefits; reduced claims; and risk selection
• Enhanced control: You gain control through data transparency and structural optimization
• Limited volatility: You benefit from the group captive serving as a shock absorber for large claims or during substandard years
• Group power: You can leverage a larger data pool with the sharing and implementation of best-in-class risk control efforts.
• Increased employee productivity: You will benefit from improved employee health which leads to less presenteeism (working while sick) and absenteeism.

This video provides a broad outline of the captive model for preliminary informational purposes.