Medical Stop Loss Captive

Small and mid-sized employers are increasingly exploring Medical Stop Loss captives as a viable alternative to traditional self-funded health insurance and first-dollar health insurance programs. By incorporating a captive insurance overlay, these captives leverage the advantages of self-funded health plans while offering greater stability in excess/reinsurance costs.

What's the problem Employers are facing?

Employers are well aware of the substantial increase in healthcare costs over the past fifteen years, surpassing inflation by a significant margin. This is evident in Table 1, which compares premiums to the Consumer Price Index, the benchmark used to measure inflation. The data highlights the substantial disparity between healthcare cost growth and inflation rates.

In the past twenty years, the expenses incurred by employers for family premiums have increased by over threefold across companies of all sizes, as shown in Table 2. For employers, healthcare expenditure often ranks as the second largest operating cost, following employee wages. It is also typically the fastest-growing expense that they perceive as challenging to control.