Frequently Asked Questions
Everything employers, brokers, and partners need to know about our captive approach.
General Questions
What is a Captive?
A Captive Health Insurance arrangement is a financial vehicle we call “partial self insurance with a twist”. More than 90% of Fortune 500 companies self-insure. A Captive replicates the size and stability of a larger organization and helps mid-sized companies benefit from data transparency, control and cost-savings.
A Captive provides insurance to, and is controlled by its owner members. The Captivated Health® model structures the Captive around employers within a given industry who share the common goals of improving the efficiency of their health care financing while saving money, and improving health and well-being.
To start a Captive Cell, all that’s needed is 3 employers within a similar industry or affinity group and 500+ enrolled employees.
Is the Captivated Health platform available to any industry?
Yes! Any industry is eligible to participate in the Captivated Health Platform. Our risk cells are established with unrelated organizations in a similar industry or affinity group who also have shared values, risk profile, and a common language. A minimum of 3 organizations and a minimum of a total of 500 enrolled employees are needed to create a new cell.
What is the difference between Traditional Insurance and a Captive Solution?
In the traditional model, an organization is the plan sponsor and assumes all the risk. They have little to no data available to them, limited visibility into claims and vendor margins, and premiums can spike with market conditions.
In a captive solution, the organization is the plan sponsor with full control.They have full transparency into claims and vendor performance, members control plan design, vendors, and service contracts, and most importantly, they have more stable, predictable costs through scaled and pooled underwriting.
What is the Renewal date?
Employers can choose the plan year dates for their benefits. No matter what date an employer chooses, the stop loss policy renews on July 1.
What is the process for selecting the Health Care Administrator?
Captivated Health® has several national Third Party Administrator options available for employers to choose from.
Do I need to bring on an additional team member to manage the process?
No — you won’t have to hire anyone additional. Our team becomes an extension of YOUR team to help handle feasibility, design, vendor coordination, implementation, ongoing analytics to maintain your plan. We manage day‑to‑day vendor oversight, provide member communications and training, and deliver quarterly reporting so your team can focus on core priorities while retaining strategic control.
Financial Questions
What are the financial risks of Captivated Health®?
As with any partially self-funded program, there is some level of risk that an organization must assume. How much risk and in what fashion is determined by the specific deductible and aggregate corridor selected.
How does a Captive Solution differ from traditional ASC funding?
Partial self-funding is not a new concept, but it has traditionally been reserved for larger employers, whose size provides the predictable claims experience needed to effectively price the plan. A Captive arrangement makes partial self-funding available to more modestly-sized employer populations through an elegant, self-insured multiple entity risk-sharing arrangement.
Are there any special stop loss provisions?
Captivated Health® is custom designed to ensure that there are no gaps in coverage. This provides year-to-year stability and protects employers from some of the most common problems experienced by employers in individual partially self-insured arrangements.
What is the collateral?
Collateral is the reserve that each organization sets forth for claims that fall within the captive layer and which exceed the ceded premium of all member employers.
Does the stop loss carrier keep all the risk?
Berkley Accident & Health covers all individual claimants in excess of the captive deductible level. There is also aggregate coverage should total claims exceed the aggregate corridor.
What happens if one or more employers leave the Captive?
Employers can exit at any point in time, as long as they provide appropriate notice. Should an exiting employer return to a fully-insured arrangement, there is Terminal Liability in place to mitigate any gaps in claims coverage that may be caused by the transition.
What happens if I have several large claims?
If you experience several individual claimants who exceeded your specific deductible, their claims would be covered by the specific stop loss coverage.
What is my maximum exposure?
Maximum exposure is the total of claims and fixed costs that are the employer’s responsibility. Any costs beyond that maximum exposure are covered by the stop loss carrier.
Sales And Renewals Questions
Can I carve out benefits?
At this time carving out benefits (such as any portion of medical or pharmacy benefits) is not permitted. Additionally, any tools and resources identified as requirements may not be carved out.
When we join, do we in any way pick up the tail of experience from members of the Captive?
After the first year in the program, employer members convert to a “paid contract,” so they do pick up the tail of any other members.
What does my monthly bill include?
Each month the TPA will send a bill that includes all administrative fees and stop loss premiums. These are paid on a monthly basis. The TPA will notify you on a weekly basis of any claims to be funded and will make a draw from your account on a set day.
Do you want to take control of your healthcare and insurance future?
Complete the 8 Questions Checklist to see if Captivated Health is a right fit for your organization
Ready to take control of your health insurance costs?
Book a 20 minute call with a Captivated Health Solutions Consultant to see how we can help you save money on your biggest line item expense.