Cost Containment & Group Captive Insurance
With no relief in sight from constant health insurance hikes, group captive insurance plans are becoming a popular, more economical solution for employee benefit plans. How do they work? The captive structure is simply a risk vehicle alternative to traditional, high-cost group insurance plans. It’s a form of self-insurance that is partially funded by employers and allows members – versus commercial carriers – to benefit from underwriting profits, investment income and tax advantages. CypressCap was created to help companies with 50+ employees reduce their overall health benefit costs. The transition to group captive insurance is virtually seamless for employees. They’ll pay less for insurance premiums and deductibles, as well as reduced amounts for office visit co-pays and prescriptions.
How CypressCap Works
- CypressCap uses a fronting carrier – a fully-licensed insurer who issues policies and reinsures some of our group captive’s risk for a set fee – to reinsure the coverage layer between $25,000 and $250,000 for each employee in the plan.
- The fronting carrier provides CypressCap with the premium for this layer. By using a fronting carrier, a program aggregate limits the group captive’s exposure.
- Each employer within the group supplies collateral to CypressCap to be used in the event that expenses exceed maximum projections and premiums collected are inadequate. If any group captive retention funds are not used at the end of the plan year, they are pro-rated and paid back to employers.
Learn more in our whitepaper: