Is a captive the right fit for your organization? Here's how these arrangements actually work.
Captive insurance arrangements have become an increasingly common alternative to traditional fully-insured coverage for mid-sized employers. Here's a plain-language explanation of how they work.
In a group captive, a number of employers pool a portion of their claims risk together, rather than transferring all of that risk to a traditional insurance carrier. Each member typically retains responsibility for predictable, smaller claims while the group collectively shares risk on larger, less predictable claims through reinsurance.
Captives can offer more transparency into claims data, more control over plan design, and the potential to share in favorable underwriting results — advantages that are typically unavailable in a fully-insured arrangement.
Captives generally aren't a fit for every employer. Group size, risk tolerance, and financial stability all factor into eligibility, and the underwriting process is more involved than a traditional renewal.
The best way to know is to have your specific numbers — census, claims experience, and current funding arrangement — evaluated against captive eligibility criteria. That's exactly what a benefits analysis is designed to do.
A captive arrangement changes how risk is shared behind the scenes, but employees still need to understand their day-to-day coverage. Every UBA Health captive engagement includes custom, company-branded materials, text message campaigns, short explainer videos, and a certified benefits counselor available to every employee — so a more sophisticated funding model doesn't translate into more confusion.
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