Benefit Solutions

Medical Stop Loss Captives

A captive is what we call an alternative financing vehicle for taking risks and can be done by a single company or by multiple companies. Group captives can be made up of companies in the same industry or different, as well as open to different sizes and regions.

Group Captives exist to give employers:

  1. Control
  2. Lower overhead cost from inefficiencies at the ‘retail’ carrier level
  3. Long term stability and more predictability
  4. Data transparency
  5. Collaboration of best practices to control and reduce risk
  6. Lower stop loss cost from the groups buying power and higher overall attachment point

In a group medical stop loss captive, each employer establishes a separate self-funded benefit plan and purchases a separate medical stop-loss policy. There is no comingling of plan assets, nor is there joint risk-sharing among the benefit plans of individual participating employers. and each employer maintains full control of their benefit plan.

The captive participates only in the medical stop-loss coverage, which is separate, (not directly connected), to the benefit plan itself.

Medical Stop Loss Captives Figure

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