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.