For years, large companies have employed alternative risk transfer strategies, such as self- funding.Mid-market companies now have a similar option, in a group captive: an insurance company that is owned by its participants. A group captive takes advantage of the economies of scale and negotiating strengths inherent in a large census to reduce insurance costs, lower risk profiles, and optimize tax savings. An added benefit of captives is the distribution of potential underwriting and investment profits.InCap
group captive solutions focus on what survey after survey shows to be the most important and desirable employee benefit – but also the second largest employee expense after salaries and wages – health insurance. With InCap group captive programs, these benefits are available to middle market companies, non-profit agencies, groups and associations, through pooling organizations with similar interests and / or risk profiles.The primary benefits of participation in an InCap program to cover employee health insurance comes down to a greater degree of control. When you participate in a captive, you control costs, you control cash flow, you control claims, and you control risk.
Take a look a look at how a greater degree of control benefits InCap participants…
Flexibility
A group captive offers flexibility in policy design and coverage, premium payment timing and claims handling.
Claims Control
In a group captive, participants dictate claims handling procedures, cutting down on the red tape – the entire process is streamlined, optimized, and reported transparently.
Risk Management Process
A group captive can give you the power to coordinate and improve your employee health insurance program, and also yield financial benefits.
Pricing & Underwriting Stability
The increased census of a group captive insurance program helps protect you against market volatility and makes your employee health insurance costs more predictable.
Lower Risk Financing Costs
Capitalization costs for a captive are significantly lower than those of a conventional insurer; combined with a reduction in premiums and potential tax benefits, captives can smooth overall costs over time.
Cash Flow Management
Captives can match revenue and expenses by reserving from current funds for future claims, and operate on a pay-as-you-go basis.
Access to Reinsurance
Captives get access to coverage at rates typically available only to insurance companies, and reinsurance markets can also provide additional capacity and more limits of coverage.
Provision of Coverage Not Otherwise Available
Where a single entity may be unable to offer some health benefits for a reasonable cost, the economies of a captive provide many more options.
Enhanced Coverage
By controlling and reducing premiums and claims losses, captive participants can often enhance their employee benefits plans without increasing costs or deductibles.
Wellness & Compliance
Participation in a captive means more than aggressive claims management, and successful captive participants frequently reduce claims with wellness and compliance programs.
Improved Risk Management Strategy
When you transfer your risk to a captive, you protect your operating budget and provide a stable financing mechanism for your employee health insurance.
Recapture Investment Income
Captives also make it possible for you to retain underwriting and investment income, which can, if desired, be applied to offset claims losses.
InCap is a registered trademark of Clark & Lavey Benefits Solutions, Inc.