Control Your Company’s Healthcare Costs – Take Them “Captive”

A recent online article by Michael Schroeder recommends what I’ve been advising my clients for years: employers can control an expense that is rising by double digits through self-funded ”captive” employee health insurance.

You’d be smart to do it. The average cost of insuring a family is rising past $25,000 annually, so the days when you could rubber stamp a plan and forget about it are over.

After all, when you make a major purchase for your business, you examine the cost, the suitability of the purchase, and an estimate of future expenses related to the purchase. You should follow a similar strategy for purchasing employee benefits.

Resolve to change. Choose to control the ever-increasing cost of health insurance. For many employers, self-funding with a Captive Insurance Program may offer the opportunity to do just that.

Employee benefits are one of the biggest costs of operating your business, so why not take a long-term strategic approach to control costs? Otherwise, your business will continue to be held hostage to a system that costs you more every year. The self-funded Captive Program is an alternative that many middle market businesses will find to be a long-term health insurance solution.

The article by Michael Schroeder advocated these important steps:

1. Make sure your funding strategy chosen includes ultimate costs based on what you actually spend. A variable cost spend will allow a return on your company’s investment in cost-saving strategies.
2. Have a deep dive into the benefit plan document taken by a qualified attorney with ERISA experience and a health care clinician, to assure the most efficient coverage for medical expenses. While plan documents can exceed 100 pages in length and contain mind-numbing prose, you can be greatly rewarded for engaging professionals to assure the claim coverage is done with your company’s interest at the forefront.
3. You should make it clear in your communications with your employees that their health matters to you and its funding is a top priority. Encouraging activities from nutrition to exercise should be interpreted as clear evidence that your employees’ well-being is good for your business. A culture of health and wellness is really an essential and efficient economic choice.

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