Frequently Asked Questions
Quick answers to navigate captive insurance like a pro
Healthcare costs are a significant expense – a top 3 expenditure – for most businesses. With the medTRANS captive solution, the business can increase profitability and save money.
medTRANS is a heterogenous captive, and any class of business can join, subject to medTRANS underwriting policies and procedures.
100 employees or greater, but medTRANS can accommodate smaller groups dependent on certain qualifications.
New members are not required to participate in medTRANS for any minimum time period, however, if a captive participant wishes to attain success within the program, a three-year period is recommended to realize the best rate of return on investment. Further, if a member leaves prior to the conclusion of said three-year period, their initial capital contribution is at risk should the member leave medTRANS with net underwriting losses.
The premium paid from the insured business to its cell captive is reported on financials of the cell captive, but such premium is remitted to medTRANS for payment of claims until underwriting profits are due to be released to the cell captives.
medTRANS is a licensed and regulated captive insurance facility. It is 100% owned and governed by its participating cell captives.
medTRANS is a direct writer captive, which means medTRANS does not have a fronting carrier like a group captive.
medTRANS manages the stop-loss policy and subsequently provides the policy to each cell captive participating in the medTRANS risk pool. Then, the cell captive issues the policy to the insured business.
Yes, each employer may choose their own level of risk retention.
Each cell captive generally cedes 100% of their captive’s medical stop loss risk to medTRANS, and medTRANS retrocedes 100% of the said risk back to the collective cell captives.
medTRANS is domiciled in Nevada.
Captives depend on outside organizations to provide key services for their day-to-day operations. The medTRANS service providers include Complete Captive Management Services, LLC (captive manager) and Jeffrey D. Miller & Company (actuary).
A captive is a licensed and regulated insurance company that provides insurance to its insured – the business who purchases insurance coverage through the captive. The primary purpose of a captive is to insure the risk of the participating business, and allow the owner of the captive and/or insured business to benefit from the captive’s underwriting profit. Simply put, when you are a business owner and you need to cover insurance risk associated with your business, you either purchase insurance coverage from a commercial insurance carrier or you can establish a captive insurance company to protect your business against those risks.
A medical stop-loss captive provides its participants the opportunity to control their medical insurance costs. The employer (insured business) self-funds an employee benefit plan for their employee, and then insures risk retention limits though a captive insurance program. Unlike fully insured health plans, there are many resources available to the participating employers to control costs and increase underwriting profits in an otherwise pure expense for a business.
There are many advantages to captive participation, including:
- Customized insurance coverage
- Transparency and risk management
- Combined buying power among captive participants
- Underwriting profits and increased cash flow
A good candidate is a mature company that’s currently seeking to control their healthcare spend, and has a desire to engage in proactive risk management and participate in underwriting profits. Successful captive participants are owners who understand that risk financing is a long-term solution, and are willing to get involved in the captive culture by participating in meetings and engaging in the governance.
To find out if your company is a good fit for medTRANS, contact Phillip Holowka at Complete Captive Management Services at 412-396-9696.
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