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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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Group Medical Stop Loss Captive Achieves Savings

Higher Education
February 23, 2015

Looking for a solution to the high cost of health insurance? Here is a brief description of how a group of New England higher-education institutions developed an innovative approach and achieved savings.  

Spring Consulting Group, LLC, a sponsor, has been working with a large group of institutions of higher education in Massachusetts to pinpoint opportunities for greater health care program efficiency and savings. It conducted a thorough feasibility study, and the group determined that the best course of action was to join together and implement joint purchasing of administration and to efficiently self-insure their health risks using a captive insurance program.  

The Educators Health Insurance Exchange of New England (EdHealth) was formed to achieve these goals and transition the group to a Vermont-based stop loss captive. It was launched on July 1, 2013, with a core of six colleges and universities participating on the first day.

EdHealth was developed based on the belief that collaboration among best-in-class institutions would create a mechanism for leveraging economies of scale to significantly improve health care buying power and provide efficiency in program design, administration, and funding--creating a platform for true population health management based on the needs of its members.

It has certainly accomplished all of this and more.

To date, EdHealth’s results include significant savings on administration charges as well as 22 percent savings on stop loss premiums. Since many schools were initially fully insured, additional gains of an estimated 2.5 percent to 4.0 percent were saved by self-funding. Overall, the captive program is already demonstrating savings for all participants after only 1 year of activity.   

As EdHealth enters its second full year, it is going strong and has a very ambitious set of goals. The member institutions are focused on developing a strategy that will continue to provide quality care with more participant involvement, cost containment, and further collaboration on disease management, wellness, and prescription drug costs, leading to a healthier and more effective work force that simply needs to spend less money on treatment. EdHealth has also grown with about 15 members on board as of January 1, 2015. The EdHealth team is also in the process of implementing expansion plans that will grow EdHealth not only in Massachusetts but also well beyond the state’s borders.

EdHealth is a groundbreaking approach to group collaboration in an industry where each college is unique with very specific human resources expectations. The success in the first full year of EdHealth has made it a trailblazing model for the higher-education community and other similarly situated industries, going forward.

See the Spring Consulting Group, LLC, website and sponsor profile.

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