Health Captives: Know Your Options

April 10, 2019

Captives, Employee Benefits

As a consumer, I want to know and understand my options when I make a purchase. For me, the larger the price the more research I tend to do before making a final purchasing decision. This is a pretty common behavior among the people I know.

When it comes to purchasing health insurance, I encourage employers to explore their options.

There are many ways to structure the way you offer health insurance to your employees. It is common to think about the various options for designing your plan – leveraging employee premiums and out-of-pocket expenses to drive behavior. So why aren’t more employers doing the same for how they fund their health plan? Traditionally, when an employer thinks about how they are going to fund an insurance program, they think their options are either fully insured or self-funded. With those binary options in mind, employers might not explore all of the possibilities available to them for funding their health insurance.

There is another solution…

One option to explore is a health captive. Entering a captive insurance program can give you a new level of control and financial independence. A captive insurance program allows employers with as few as 50 employees the ability to self-fund their health insurance with a different way to diversify the financial risk. Ultimately a captive insurance solution can allow you to join with other like-minded employers to take on more risk and create your own insurance company.

Every employer is going to have a different strategy for purchasing health insurance. Your purchasing decisions should be based upon your unique goals and appetite for risk. As you explore the health insurance market, I encourage you to explore captive solutions. Only with all the information available, can you make the best health insurance purchasing decision to fit your organization’s unique needs.