January 21, 2022

Discover The Benefits Of Implementing Group Medical Strategies

4 min read

Jarid S. Beck, ACI, ARM; Managing Director, Risk Management Advisors

Using a captive insurer as a group medical strategy can help you avoid the treadmill of higher prices, and insurance company profits are your expense. But there are also some other benefits you’ll experience—including one that might surprise you!

If you’re ready to discover the benefits of implementing group medical strategies, read on.

Financial Advantages

Usually, to save money on health insurance, you have to reduce benefits or cut out health coverage. With a captive insurer, you spend less because you’re only covering real medical costs. If costs are lower than average, you get money back.

Best of all, average costs don’t increase dramatically yearly, so you won’t see huge increases at each renewal.

What will you do with the savings?

You can turn around and re-invest in your employees. You can offer additional preventive health measures, free gym memberships, or other incentives. Or, maybe this year, you can add extra coverage.

Reinvesting those savings in your company means the profits benefit you, not someone else.

More Protection Than Pure Self-Insurance

The most common type of captive insurance company is a “single-parent captive insurance company.” These companies typically insure the risks of the parent company, its subsidiaries, and its employees. The parent company can also be its own subsidiary company.

Wanting to control costs and only pay for actual medical expenses is ideal for every company, but being fully self-insured is very risky. If you have a year of very high medical costs, it can damage your core business.

A captive health insurance company provides an extra layer of protection. Because a reinsurer or stop-loss carrier is covering extreme circumstances, you can rest assured that you won’t have to contribute beyond the plan's defined maximum.

Not having to set money aside for extreme cases allows you to enjoy the predictability of self-coverage without the excessive risk.

Less Stress Around Renewals

Does any benefits manager enjoy renewal season? Not usually! The stress of preparing for multiple hour-long meetings full of negotiation and tough choices means that most managers hate that timeframe.

One of the most surprising benefits of a group medical strategy is that renewal season is easy and stress-free. You get your time back, and you reduce your anxiety. What used to be several hours of meetings becomes a single 15-minute session.

Why? With a captive group insurer, you won’t face considerable increases in premiums annually. The underlying cost of care doesn’t increase that much year to year, so you’ll likely be paying a similar or lower premium.

Who doesn’t want a more peaceful renewal season?

As you can see, there are many benefits to using a group medical strategy. If you’re ready to learn how to benefit, we’re here to help.

Discover if a self-funded group medical plan is the right fit for your business.

Take the assessment to find out:

https://www.riskmgmtadvisors.com/group-medical-benefits-assessment

The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.

Jarid S. Beck, ACI, ARM; Managing Director, Risk Management Advisors

Jarid S. Beck is a Managing Director at Risk Management Advisors. He is a career specialist in the design, implementation, and management of alternative risk management (ARM) strategies, including self-insured plans and captive insurance companies. Jarid's diverse insurance background allows him to deliver technical insurance solutions to clients in a wide variety of industries, including construction, real estate, staffing, manufacturing, trucking, and finance. Jarid was awarded the Associate of Captive Insurance (ACI) designation from the International Center for Captive Insurance Education (ICCIE) and the Construction Risk Insurance Specialist (CRIS) designation from the International Risk Management Institute (IRMI). He is a noted authority on using self-insurance and captives as a tool for companies to reduce the cost of providing group medical benefits. Jarid graduated from the University of California, Riverside, with a degree in Business Administration.