Health Insurance Captives: Avoid The Hassle Of Yearly Shopping

October 14, 2019

Health insurance captives offer a long term solution to shopping your health insurance every single year.

Captive health insurance programs provide the stability and flexibility that large employer’s experience, down to small and mid-size employers with 25 to 1,000 enrolled members.  They also decrease the risk of being self-insured on your own through a captive layer of funding, and since you become the insurance company, you keep any underwriting profit the carrier would normally take.

Our captives allow you to choose your own third party administrator, carrier network, and pharmacy benefit manager.  The fixed costs are typically 15%-20% of your total medical spending.  When you are fully insured, your fixed costs are 100% of your spend.  Even a typical self-insured plan includes fixed costs of approximately 40- 60%.

The retention rates are in the high 90% range with the average increase in total spend averaging less than a 2% increase year after year since 2010. Typical first year realized savings average 5% – 20% below fully insured options.

Our Alera actuaries show a typical company will have a poor claims year 1 out of every 5 years.  The four years where claims run well, companies are over paying for their insurance.  In that bad claims year, you have the protection of the captive to avoid the roller coaster of renewal increases.  Even if you receive a 20% renewal increase in a captive, it is a 20% increase in your fixed cost not your total spend if you were in fully insured or level funded plans.

We have captive options for companies with 25 – 1,000 enrolled employees.  Companies that have more than 1,000 employees can still take advantage of some tax benefits of creating a single cell captive.

Contact our benefits department to learn more.



Todd Linn

Employee Benefits Manager

    Alera Group, Inc. is aware that there are persons fraudulently impersonating our company by using fake internet domains that appear to look like our legitimate services. If you are contacted by someone claiming to work for Alera Group, or any of our partners, please carefully review the email address and domain. If you have a relationship with our company, please contact us directly and not through any information that is provided in such an email. Please be extremely careful in responding to such emails with personal and financial information, sharing passwords, or any other information of value. Alera Group, or any of our partners, will never send ACH instructions via email and thus we strongly recommend that you verify the authenticity of each wire transfer request by calling your Alera Group contact using the number you have previously called.