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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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Medical Stop Loss Captive Insurance Use Growing, QBE Report Shows

Doctors Surgeons
April 21, 2016

A recent white paper published by QBE North America discusses the increased use of medical stop loss captives by companies that self-fund their employee health insurance plans.

"Properly structured captives can stabilize, and even lower the cost of medical stop loss coverage, and they can facilitate enhanced benefit delivery, over more traditional self-insurance, for many employers," concludes the white paper's authors, Phillip C. Giles, CEBS, vice president, sales and marketing, accident and health, QBE North America, and Steven A. McFarland, vice president, underwriting, accident and health specialty markets, QBE North America.

Due in large part to the Affordable Care Act (ACA), 60 percent of all employers are now self-funding their employees' health care, explains the white paper, titled "Medical Stop Loss Captives: Issues and Answers." The article is an excellent primer for employers who currently have self-insured healthcare programs, as well as those considering this alternative risk financing technique.

Topics covered in the comprehensive "QBE Insights" article are as follows.

  • Benefits of arranging medical stop loss coverage through a captive

  • Implications for the parent organization of using a captive for medical stop loss

  • Explanation of captive types

  • Distinction between group captives and Multiple Employer Welfare Associations (MEWAs)

  • Group captive mechanics

  • Determining whether a stop loss captive is appropriate for an employer

  • US Department of Labor (DOL), Employee Retirement Income Security Act (ERISA), and state regulation

  • DOL approval requirement for stop loss captives

  • Fronted insurance versus reinsurance

  • Medical stop loss captive tax advantage enhancement possibility

  • Necessity of risk management for success

  • Domicile considerations

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