Captive Health Insurance · Indiana
A group medical captive lets like-minded employers pool their risk and share the savings instead of handing them to a carrier. Members self-fund small claims, pool mid-size claims together, and buy stop-loss for the catastrophic layer.
It's a middle path between going fully insured and self-funding alone. Favorable performance may be returned to members under the captive's governing terms, but results vary by program and claims experience.
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How It Works
A captive isn't a product you buy off a shelf. It's a funding structure built in layers. Each layer decides who pays which claims, and that's where the savings live.
Before You Join
A captive is powerful, but it's a commitment, not a quick switch. These are the four things every employer should weigh first. All manageable with the right advisor.
Members may need to post capital or collateral to secure the group's obligations. Requirements, return terms, and exit conditions vary by program, so the cash commitment needs to be modeled before joining.
Captives are generally designed for a multi-year commitment, not a one-year transaction. Employers should understand renewal, withdrawal, unresolved-claims, and capital-return terms before joining.
Members manage their claims data, run cost containment, and participate in governance. A set-it-and-forget-it employer won't see the returns a captive can deliver.
Eligibility depends on covered lives, claims history, risk tolerance, and the captive's underwriting rules. Employers with known high-cost exposure may face different terms or find another funding structure is a better fit.
FAQ
Captive health insurance (also called a group medical captive) is a funding structure where a group of employers band together to form and own an insurance company that funds their mid-size health claims. Instead of paying premiums to a commercial carrier, members self-fund their own small claims, pool medium claims in a shared layer, and buy stop-loss insurance for catastrophic claims. When the group runs healthy, unused funds are returned to members as dividends.
A group medical captive can improve cost transparency, allow participating employers to share a defined layer of risk, and return favorable performance under the program's governing terms. Potential savings depend on claims, fixed costs, underwriting, stop-loss terms, governance, and the employer's time horizon. A captive should be compared with the employer's best fully insured, level-funded, and standalone self-funded options rather than judged on a headline savings estimate.
A self-funded employer carries its own risk up to its stop-loss attachment point on its own. A captive spreads that mid-layer risk across many employers, so one bad quarter is cushioned by the pool. Captives also come with peer benchmarking, shared data tools, and advisory councils that standalone self-funding doesn't include. Many employers use a captive as a more stable on-ramp to self-funding.
Eligibility varies by captive. Programs evaluate covered lives, claims history, industry, risk tolerance, participation requirements, and the employer's willingness to manage costs actively. The right test is whether the program's underwriting, shared-risk structure, governance, and exit terms fit the employer better than available fully insured, level-funded, or standalone self-funded options.
Capital or collateral requirements vary by captive and may be based on contributions, stop-loss premium, shared risk, or another program formula. Employers should ask how the amount is calculated, when additional funding can be required, what happens after a deficit, and when capital becomes eligible for return after exit and unresolved claims.
Yes. Burt Advisory is based in Elkhart, Indiana and helps school systems, municipalities, manufacturers, and other Indiana employers weigh captive, self-funded, level-funded, and fully insured options side by side. We model the numbers against your current plan, evaluate captive programs, place stop-loss, and manage cost containment through the United Benefit Advisors network.
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