Healthcare Benefit Captive Program: The Missing Piece to Taking Control of Your Healthcare Costs

Despite the rise of work perks such as free lunch, games in the break room, or extensive paid-time-off, the most desirable employee benefit remains a top-tier, quality healthcare benefits program. With premiums for healthcare coverage out of control, dealerships are often faced with difficult choices when managing the expense of an employee healthcare insurance program.

According to PWC, more employers are now taking matters into their own hands. These “employer activists” are implementing bold steps to contain costs. They are negotiating contract prices, setting up provider networks, and, in some cases, building parallel health systems to take care of their employees at more manageable costs.

What is a Healthcare Benefit Captive?

A healthcare benefit captive is an independent insurance company created, cultivated, and owned by at least one non-insurance business. These astute captive members share a strategic mindset, are aligned with best practices, and expect better all-around performance. Essentially, captive members participate in a shared risk pool that leverages unison and long-term strategies.

Incorporating a healthcare benefit captive into your business strategy allows for more control and ownership of your employee healthcare plan. Not only does the program provide market leverage, but it will reduce your long-term health care costs, improve employee wellness, and streamline healthcare delivery. Your dealership will have the advantage of a self-funded program without the risk of self-insurance and catastrophic loss.

Pros of a Healthcare Benefit Captive

A healthcare benefit captive program provides several advantages to dealership owners that traditional insurance plans may not offer.

Controlled Costs

A healthcare benefit captive tailors the insurance to match your most common business risks. Similarly, customizing your policy allows you the ability to broaden coverage in areas that would otherwise be unavailable or extremely expensive in the standard marketplace. This approach lets employers control costs and cover staff members for medical conditions or pharmaceuticals that would otherwise be impossible through the traditional insurance market.

Increased Stability

By pooling together with other dealerships, a healthcare benefit captive can generate increased stability because the renewal rate links to your dealership’s history and individual claims rather than an all-inclusive industry benchmark. Therefore, your healthcare benefit captive program can stabilize year-to-year rate increases. No longer is your dealership at the will of the insurance carriers.

Improved Transparency

Better transparency can help your dealership keep costs down. With a healthcare benefit captive, your loss history and individual trends are a foundational piece of the pricing. Because you own the insurance company, you can use your claims data to demonstrate the stability of your plan and avoid huge renewal increases.

Returned Underwriting Profits

The opportunity to receive the underwriting profits can motivate dealerships to develop strategies that encourage improved health of participants and proactively manage risk. Conversely, a standard reinsurance contract shifts all risk and reward to the insurance carrier with no potential upside to the dealership.

Choosing the Right Partner

Dealerships, big and small, are turning to healthcare benefit captive programs.

For over 100 years, Ourisman Automotive Group in Maryland has believed “if you take care of your business, your business will take care of you.” As the automotive industry continues to evolve, there has been one constant. It is about the employees and nurturing a great team. Therefore, Ourisman Automotive Group never takes for granted that the dealership has a responsibility to provide every employee and their family with comprehensive and affordable health insurance.

What was once an uncontrollable expense, Ourisman Automotive Group has already saved more than $700,000. Through data-driven health plans, which offer better care options and easier access to insurance. Additionally, it provides Ourisman Automotive Group the visibility needed to manage and measure its most expensive investments.

When it comes to changing your employee healthcare benefits program, extricate yourself from the shackles of traditional insurance and invest in a healthcare benefit captive. Dealer Management Group, along with BevCap Management and WellNot Healthcare, can help you structure a program best suited to your dealership needs.