Employee Medical Stop Loss

Writing medical stop loss coverage in a captive is a growing solution for both large and small to mid-size organizations like yours.  It allows you to reduce your fixed employee healthcare benefit costs and retain the underwriting profits that your commercial insurer now keeps.  Combined, you can better manage your year-over-year costs and improve your cash flow – because of this, there’s been significant growth in this area for captives over the past decade.  We can help you setup a rent-a-captive solution that’s right for you, whether that’s a single- parent captive writing medical stop loss or ERISA (Employment Retirement Income Security Act) benefits or a group or agency captive program that may not be subject to ERISA.  Your Employee Medical Stop Loss captive options under Green Mountain are…

Single Parent

With the evolution of the Patient Protection and Affordable Care Act many larger employers who currently self-fund their medical plans have either considered writing this coverage in their existing captive or including it as they develop a captive insurance company. In addition to retaining underwriting profits and reducing fix costs, writing medical stop loss allows for diversifying a captive’s risk portfolio. This addition can provide short-tail stability versus many of the other insurance lines traditionally covered by a captive, which tend to be longer-tail in nature.

Groups & Associations

Whether heterogeneous (dissimilar industries) or homogeneous (similar industries), the objective of a group captive is to enable an alliance of mid-market employers to replicate the risk profile of a single large company. That is, to enable the spreading of risk, thereby achieving greater risk stability and cost savings from service providers otherwise not as readily available individually. Group medical stop loss captives can be sponsored by benefit consultants, an alliance of brokers, associations, or other organizations that work with mid-market employers.

A medical stop loss captive could be right for you if…

  • You are looking for a solution to help you mitigate rising healthcare costs;
  • Your organization is a financially stable mid-market employer or group of such employers each with 50 – 500+ employees;
  • You already have your own self-funded health plan, where you actively participate in plan losses, or are considering one;
  • You take a forward thinking, progressive approach to employee health and wellness; and
  • You are committed to a long-term strategy for improving employee health benefits.

Agency & Programs

An agency captive can be organized to produce an underwriting profit and become a profit center for you. Such a captive is controlled by you as the insurance agency or brokerage firm producer, and through a reinsurance agreement with a commercial insurer, your captive receives a share of the premiums written and is obligated to pay its share of claims.

The size of the agency captive market is hard to accurately estimate, but it is generally accepted that the market is over $4 billion. A significant driver of agency captive ownership and growth are “program” captives, a $32 billion market where the premium is generated from the producer’s expertise in a specific industry or market. Commercial insurers are also fueling the growth in agency captives as many outsource traditional carrier functions, including underwriting, claims, and policy management to qualified and experienced agents, brokers, and other intermediaries.

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