Employee Benefits

Managing Employee Benefits With a Captive

Offering healthcare benefits to employees is costly for a business.

The advantages of captives and employee benefits include reduced costs, the ability to cover unique risk factors and increased cash flow.

What is a Captive?

With this type of program, a parent group creates a licensed insurance company to provide coverage. This process avoids traditional insurance companies, which may not meet the needs of a business.

How Does It Work?

Employers take on the risk instead of paying a premium to an outside insurer. With the savings, cash can accumulate and create investment income.

What are the Advantages?

Some strong points of a captive include:

  • Optimized employee benefits
  • Program control
  • Access to reinsurance markets
  • Voluntary benefit offerings
  • Flexible plan design

Companies can offer consistent coverage so that all individuals have access to appropriate insurance. They can also take a third party premium for voluntary benefits specific to an employee’s needs.

What is the Main Benefit?

Employee benefits impact a company’s finances and the health and well-being of the staff. A traditional plan limits the employer’s access to data. With captives and employee benefits, the company receives all of the reporting. This transparency enables owners to make informed decisions. A business can then control costs and proactively manage the well-being of employees.

Employers need ways to reduce the cost of employee benefits. The use of captives to fund disability, health and life insurance provides cost savings, adaptability and control.