Swimming in a Cleaner Pool: Wellness and Captive Insurance

Captives, Employee Benefits

As an employer, your group health insurance plan likely falls into one of these categories: fully insured, self-funded, or captive. There are some big differences between them, of course. But do know one way they’re the same? They all work from the basic notion that pooling employers together helps manage risks—and costs.

To put it another way, when it comes to group health insurance, basically everyone is in a pooled group of some kind (with a few exceptions, like massive corporations).

But here’s where it gets interesting. Just who you’re pooled with has a huge influence on your insurance rates. And that’s where our three categories of group health insurance are definitely not the same.

Captive insurance: a pooled group held to higher standards

First, let’s be clear: a health insurance captive is way more than just a bunch of organizations coming together to, say, counter the high cost of stop-loss insurance. As one of my captive manager partners effectively puts it, being part of a carefully assembled captive cell allows you to “swim in a cleaner pool.” Why is it cleaner? Because you not only know who you’re pooled with; you know that everyone in that pool is required to implement a wellness program. That means the captive members need to hold their employees more accountable for taking ownership of their health.

Yes, that’s easier said than done. Most people can identify areas where they could be making healthier lifestyle choices. But many don’t know how to change, and even if they do know how, they lack the tools and strategies to do it. On top of that, those most at risk may shy away from embracing wellness because they’re embarrassed by their own issues, feel too far gone to be helped, or simply don’t want to change. But that’s exactly where wellness program expertise can make all the difference.

M3 has a wellness team that guides clients on the most effective ways to establish a wellness program that’s right for them within a given captive. We know it takes a tailored approach and the right wellness partner to engage employees, especially those most at risk. And that’s essential because it’s usually a small percentage of people who drive the majority of healthcare insurance costs.

Why does a captive work so well?

A captive model is too often associated solely with reducing insurance costs through joint purchasing power. It’s more accurate to think of the model as a set of agreed-upon unified risk management strategies. Chief among these is pooling like-minded employers together who commit to implementing wellness management, using the expertise of proven wellness partners, and providing their employees access to exceptional ongoing wellness resources.

What happens when captive members do those things? Employees make healthier lifestyle choices, risk factors are identified and addressed earlier, measurable positive results are produced, and over time a crucial phenomenon emerges: the trend on long-term costs begins to bend downward to amounts much lower than market averages. And isn’t that what everyone wants?

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