Group Employee Benefit Captives: All Grown Up

Captive International. October 1, 2018

Wendy Dine, associate director and employee benefits practice leader in Strategic Risk Solutions’ Washington, DC office, writes in Captive International magazine about the growth in group medical stop loss programs in captives and the cost containment strategies being used to successfully manage this line of coverage.

“With the right resources, accountability and proactive management, group employee benefit captives can save employers money, reduce claim costs and bend the medical trend curve, says Wendy Dine of Strategic Risk Solutions.

While many will debate when the first group employee benefits captive (aka group medical stop loss captive) was formed, there is no disputing the exponential growth in the use of captives to allow small and mid-size employers to partially self-insure and share a layer of medical stop loss risk in a captive.

Although arrangements can vary from programme to programme there is certainly one commonality among the most successful structures: the use of cost containment strategies to mitigate high-cost claims, overutilisation or billing errors, not only in the captive layer, but also within each employer’s self-insured retention.

All too often there is a main focus on the need to achieve critical mass in order for a programme to be successful, and while this is an important element, the need for cost reduction strategies is just, if not more, important.

How are programmes reducing claim costs and bending the medical trend curve? Medical management, concierge services, reference-based pricing, direct contracting, and medical bill review, not to mention controlling specialty drug spend. There’s no way to touch on all the approaches being used here, but the industry has seen positive results from several.”

Read the full article at Captive International


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