Risk & Business Magazine Marcotte The Magazine - Winter 2018 | Page 5

CAPTIVE INSURANCE
A “captive” is a legal entity in which many
companies band together to form a unified
risk pool. Under a captive program, the
burden of providing health insurance
coverage is jointly owned by member
participants. All are responsible for the
captive’s performance, sharing equally
in its expenses and profits. Participating
companies have the dual benefits of being
able to design their own plan while having
the resources of a larger entity behind
them.
LIKE MOST OTHER
FINANCIAL
OPTIONS,
CAPTIVE HEALTH
INSURANCE
PROGRAMS MAY
BE IDEAL FOR
SOME COMPANIES
AND NOT
RECOMMENDED
FOR OTHERS.
Here we provide a general outline of
the major benefits of captive insurance
that many of our clients have already
experienced. For greater specifics about
plan design or implementation, your
best bet is to consult directly with your
Marcotte Employee Benefits Advisor.
ENHANCED FLEXIBILITY –
When you design your own health
insurance plan, you can
focus on the elements most
needed by your workforce
and dismiss others which
may not be as critical.
For example, if you have
workers prone to back stress and injury due
to their jobs, it would make sense to include
chiropractic services in your plan. If your
employees work in a noisy environment,
perhaps an annual hearing exam would
make sense. With this degree of flexibility,
you can focus on the areas your employees
need most.
IMPROVED TRANSPARENCY -
One of the biggest problems we hear from
companies with traditional
health insurance plans is
that they have little idea of
the services being used most
by employees and those
that are underutilized. By
having the ability to access and analyze
detailed claims data, you can focus on
strengthening the benefits that are most in
demand by employees, educate employees
about lesser-used services to increase
utilization, or discontinue unpopular
services altogether in favor of something
more useful.
GREATER EFFICIENCY -
Many companies find that a captive
insurance program operates
much more smoothly
than a traditional plan by
providing reimbursements
and medical approvals more
quickly, helping to keep
your employees’ care and
recovery on track. Since you are less likely
to experience volatile premium increases,
you can often plan better and utilize
payments that normally would have gone
to your insurance company by investing
them directly on behalf of your employees
and their health.
HEALTHIER WORKFORCE -
Study after study has shown that the
majority of health care
costs in the US stem from
preventable diseases like
obesity and heart disease.
A captive plan focused on
disease management can
be instrumental in minimizing risk and
producing healthy outcomes. For example,
if your employees tend to postpone routine
care appointments, they probably end
up seeking treatment when the situation
becomes more serious and expensive to
treat. We help employers develop healthy
living programs that educate workers
about preventative care and how it lowers
their cost of care by avoiding emergency
treatments.
Despite these potential benefits, a captive
insurance plan is not for everyone.
Underwriting losses and the reduced
diversification within a smaller pool of
participants can increase risks to the point
that the captive program no longer seems
attractive. Although much of the increased
risk is offset by reinsurance, significant up-
front costs and fees may make traditional
insurance a better choice for some
companies.
Over the past few years, Marcotte has
helped dozens of companies analyze the
costs and benefits of choosing a captive
structure for their particular business.
We are available to walk you through
the decision-making process and offer
guidance based on your company’s
healthcare goals and realities.
Bill Barclay has been a leader and innovator in
employee benefit plan design for nearly 25 years.
Bill has always been a marketplace pioneer
including his early adoption of consumer
directed healthcare plans. He is a principal with
Marcotte and serves on the board of directors.
Bill works with Marcotte clients to design,
implement and communicate comprehensive
benefit programs. He has a Bachelor of Science
in Business Administration from Loras College
in Dubuque, Iowa.
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