Can a Captive Insurance Company & Self Insured Medical Plan be the answer to the Affordable Care Act?
With the Affordable Care Act looming and companies facing upwards of 50% premium increases, business owners are looking for ways to keep profits and stay in compliance.
So, do you have options?
Yes. If a business is no longer comfortable with the premium level set by the insurer, it may be time to discuss a self insured medical plan. A self insured medical plan is when the employer assumes a certain amount of financial risk for providing health care benefits to their employees. Some of the benefits include:
- Customize a plan to the needs of its employees
- The employer is not subject to the state health insurance regulations (ERISA)
- Ability to profit from low claims
- The employer is not subject to state health insurance premium taxes (roughly 2-3 percent of the total premium)
Adding a captive insurance company to a self insured medical plan will allow the business owner to retain dollars allocated for health insurance premiums in a tax efficient manner. This will result in additional surplus to protect the company in future years and ultimately be distributed as underwriting profit to the share holders.
For a helpful overview of Captive Insurance, visit our knowledge center
If you are asking yourself if your company is a good fit for a Captive Insurance Company and Self Funded Plan, we’d love to talk to you about your options. Learn More