Medical systems have historically been the quickest to adopt captives to control their employee healthcare costs. From regional hospitals with a single plan, to large hospital systems with multiple plans, the systems have found that a captive-based structure used at the parent level enables a more efficient purchase with uniform protection across plans. Instead of numerous affiliates within each human resources (HR) department buying their own stop-loss coverage, the parent can aggregate risk across their locations, giving them better efficiency, consistency and cost savings — as much as 20 percent on a stop-loss purchase, according to Timothy Pollis, SVP, Healthcare & Life Specialty Practice, Guy Carpenter.
Many other types of industries are now following suit. Virtually any large employer with a self-funded medical plan is a candidate for a captive stop-loss strategy, whether they are in manufacturing, foodservice, retail, higher education or any other for-profit or not-for-profit space. This strategy is helping employers continue to provide competitive benefits to employees, while managing costs as medical costs rise. This can even be seen with multinational employers. According to Marsh’s “The 2019 Captive Landscape” report, 53 percent of Marsh-managed captives are already writing, considering writing, or likely to consider writing benefits such as group life, multinational health and disability benefits, and voluntary benefits.