THERE IS STRENGTH IN NUMBERS
- Predictability and affordability
- Proven track record of successful management
- ACA-compliant health insurance
- Low-cost insurance for temporary staff
- Enhanced benefits for internal staff
- Opportunity for return of premiums annually
TRANSPARENCY, FLEXIBILITY, AND CONTROL
The Affordable Care Act has prompted many staffing companies with 30 - 10,000 employees to search for alternative means of providing health benefits. Self-insurance allows for greater transparency, flexibility, and control, since companies are now able to tailor their plans to fit their needs and pay only for actual costs incurred. TSE adds one additional component for the staffing industry, low-cost ACA-compliance. TSE uniquely uses the captive purchase model to add greater risk diversification across a larger pool of staffing companies, plus the opportunity for an annual return of a portion of the stop-loss premium not otherwise available with traditional self-insurance.
The concept of a purchasing coalition (or captive) is very popular and has been widely used for P&C insurance by companies of all sizes, especially small to mid-sized companies, for many years. Captives are so widely used in the P&C space, many firms may not even be aware of the fact that they are participating in one. For the past decade, captives have been used for health care insurance benefits as well. Currently, over 90% of companies with more than 5,000 employees utilize some type of self-insurance or captive for their health care programs, and a quickly-growing number of small to mid-sized firms are following suit. Specific industries, like the staffing industry, and some national franchise systems have been major benefactors of these health care captive initiatives.
Mid-sized employers, who have traditionally been unable to self-insure, can now consider self-insuring their group health insurance under the umbrella of a captive.
PREDICTABLE AND AFFORDABLE
New health insurance purchasing coalitions (group captives) are continually forming. Due to each employer being rated and charged according to their individually expected health care expenditures and risks, the “free rider” problem often found in other group plans is avoided. Employers are rewarded for their individual performance through lower stop loss premiums, and benefit from the group’s performance, as any underwriting gains remaining in the captive layer at the conclusion of the benefit year are returned to the members on a pro-rata basis.
STRONG RETURNS ON YOUR INVESTMENT
TSE believes the staffing industry represents a good non-traditional insurance risk, and therefore has developed captives which create a structure allowing participating companies to share claims, experience, and transparency, in addition to providing solid predictability. Unlike traditional insurance, the captive employs several levels of reinsurance to protect both the employer's plan and the captive itself. Resulting in a captive that is both predictable and affordable for smaller to mid-sized firms.
TSE's goal in using the health insurance captive is threefold:
- Help businesses become more competitive
- Provide smaller and mid-sized employers, who implement best practices, returns of their premiums
- Assist employers in remaining compliant with ACA regulations to avoid the fines which could cripple a staffing firm
Our underwriters have a long track record of managing group captives and have done so very successfully, returning a portion of premiums to member companies annually.