Health Insurance Captives

Greater Control.
More Predictable Renewals.

A health insurance captive gives mid-sized employers access to a larger risk-sharing environment while maintaining control over their own health plan.

For the right group, a captive can create greater purchasing power, improved renewal stability, greater transparency, and the opportunity to participate in more favorable underwriting results.

Why Employers Are Moving Toward Captive Health Plans

  • Scenic view of rugged mountains with snow-capped peaks, sandy dunes, and reflective pools of water in the foreground, under a partly cloudy sky.

    Greater Purchasing Power

    By joining a larger risk-sharing environment, employers can gain purchasing power that may be difficult to achieve on their own. This can improve access to stop-loss terms, cost-management solutions, and broader healthcare strategies.

  • A paved country road with a double yellow line, leading towards mountains with snow patches, and a house with a dark roof on the right side. The scene is set in a green field with a playground and trees, under a partly cloudy sky.

    More Predictable Renewals

    Captive arrangements are designed to reduce some of the year-to-year volatility employers can experience in traditional insurance markets. A larger pooled risk environment can help create greater stability and more predictable long-term outcomes.

  • Scenic view of forested mountain landscape with snow-capped peaks and pine trees.

    Greater Transparency

    Employers gain greater visibility into claims, pharmacy spending, utilization, stop-loss exposure, and the underlying drivers of healthcare cost. That data allows the plan to be managed throughout the year rather than simply reacting to renewal.

  • Person wearing a hoodie and backpack hiking in a rocky, grassy landscape under cloudy sky.

    More Control Over Strategy

    A captive allows employers to take a more active role in plan design, pharmacy strategy, provider access, care navigation, stop-loss purchasing, and other cost-management initiatives.

  • A mountain range with sharp peaks covered in green grass or moss, under a cloudy sky.

    Participate in Favorable Results

    Unlike a traditional fully insured arrangement, employers participating in a captive may have the opportunity to benefit when claims and underwriting performance are favorable, depending on the structure of the captive.

Is a Captive Right for Your Company?

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Frequently Asked Questions About Health Insurance Captives

  • A health insurance captive is a type of self-funded arrangement where multiple employers participate in a shared risk structure. Each employer maintains its own health plan while gaining access to broader purchasing power, shared risk, and potentially greater renewal stability.

    Most self-funded employers purchase stop-loss insurance to protect the company against unusually large individual claims or unexpectedly high overall claims. Self-funding can give employers greater visibility, flexibility, and control over how their healthcare dollars are spent.

  • Normally companies with 50 - 1,000 employees. Captives are typically considered by mid-sized employers that want more control over healthcare costs and are comfortable taking on more responsibility than a traditional fully insured plan requires. Claims history, workforce stability, cash flow, and risk tolerance all matter.

  • In a traditional self-funded plan, the employer assumes more of the financial risk on its own. In a captive, employers still self-fund their plans but share certain layers of risk with other participating companies, which can create greater diversification and potentially improve stop-loss purchasing and renewal stability.

  • Potentially, yes. Because some risk is shared across a broader pool of employers, captive arrangements can reduce some of the volatility that may occur in traditional insurance markets. Results still depend on claims, stop-loss terms, and the structure of the captive.

  • Captives are not risk-free. Employers may face claims volatility, additional administrative responsibility, stop-loss exposure, and the possibility of unfavorable underwriting results. A captive should be evaluated alongside fully insured, level-funded, and traditional self-funded alternatives.

  • In many cases, yes. Captive arrangements can often use familiar carrier or provider networks. The available network options depend on the specific captive and plan structure.

  • It can create more flexibility to address pharmacy spending. Employers may have access to alternative PBM arrangements, specialty-drug strategies, rebate structures, and other pharmacy cost-management solutions that may be harder to implement in a traditional fully insured plan.

  • A preliminary evaluation can often begin well before renewal, and any time throughout the year. We typically review current plan information, claims experience, funding structure, stop-loss considerations, workforce characteristics, and renewal timing before comparing captive options with other funding strategies.

  • No. We compare captives with fully insured, level-funded, and traditional self-funded options. The goal is to identify the structure that best fits the employer’s financial goals, risk tolerance, workforce, and long-term benefits strategy.

    Savings are not guaranteed, and results vary by employer. The objective should be to determine whether better healthcare economics can be achieved while maintaining or improving the value of the employee benefits program.

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