PCH Captive information

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Businesses with employee healthcare expenses of between $12,000 and $15,000 per year are good prospects as they should save 10% plus just by moving to PCH.

A Captive is a privately held insurance company established primarily to insure the risks of its affiliates. Captives allow a company’s risk to be judged on its own merit rather than being charged a premium based on the risk of its entire block of business. 

The captive can often provide claims handling services that can be substantially better than the service provided by commercial insurers. The owners control day-to-day operations. These operations include, but are not limited to, underwriting, claims decisions, and investment policy of the Captive.

There are several advantages a group captive health insurance policy can provide to both business owners and their employees:

1. Greater Control – The first edge a captive health plan gives your organization is a more considerable amount of control. Because you, the employer, are the policy owner, you may tailor your health insurance to exactly match your most common business risks. Similarly, customizing your policy can give you access to coverages that would otherwise be unavailable or too expensive to obtain in the commercial marketplace. This access allows employers to cover staff members for operations or medications that otherwise wouldn’t be possible through the traditional insurance market.
2. Increases Stability –  Another advantage a captive plan can generate increased stability in your health plan. By pooling together with other employers, even small businesses can gain economies of scale, making it possible to purchase a group plan at a discounted rate. Also, the deeper your pool of employees, the more likely your plan rates and information will remain stable. Similarly, your plan’s renewal rate is tied to your company’s history and individual claims rather than an industry benchmark; your captive program can stabilize year‐to‐year rate increases. No longer is your company at the insurance carrier’s will, which increases the stability and predictability of your health plan.
3. Improved Transparency – Through a physician-driven captive insurance program, your company can access population and plan data more efficiently and in more detail than a typical fully‐insured health plan. Think of it as you would managing any other aspect of your business; if you do not know what’s going on, how can you manage it?
   In addition, with this improved data, you can help employees who need it the most and ensure every employee receives the best care at the best price. This improved treatment can help you promote greater health among your employees.
4. Reduced Costs – One of the most significant advantages of a group health captive is its ability to reduce your health care spending.
   The first way a group health captive reduces costs is by reducing your fixed costs.
   Under a fully insured plan, the costs are 100% fixed.
   If you have low claims costs in the fully‐insured plan, the carriers keep 100% of the profit and pass on to you a substantial increase in cost on every renewal.
   In a group health captive, the administration costs maybe 35% of the total costs, and the variable 65% is made up of claim payments.
   When claims are low, savings are utilized to create rate stability and/or a dividend back to the employer.

American Bank Commerce has about 75 employees, and in the 1st year in the captive the company saved  $200,000 and are on track to pay less in year 5 than they did in year 1. In the insurance industry, this is unheard of, but at PCH, as a fiduciary, we put you in control to make it happen all the time.

If you have 10 or more employees and you want to see if you can provide better health care insurance to them, and at the same time add more savings to your bottom line, then let's grab coffee and talk.