Highlights
- Group captive insurance is a type of self-insurance that allows participants to share risk with other members.
- Opting for a group captive can make self-funded insurance more accessible to a small or midsize company.
- Both options can give you more control over healthcare costs.
- Roundstone enables employers to buy benefits like a Fortune 500 by self-insuring through its innovative and proven group medical captive.
Imagine having the power to take control of your healthcare spending, design a plan that fits your company’s unique needs, and even get a refund at the end of the year—all without sacrificing the quality of your employee benefits.
It may sound too good to be true, but with the right approach to self-funding, you can make it happen.
The distinction of captive insurance vs. self-insurance is a fine one — captive insurance is a type of self-insurance, an alternative to traditional fully paid insurance and a way to save money on employee health benefits.
Cost Containment in Healthcare: Captive Insurance vs. Self-Insurance
In 2023, 83% of covered workers1 in large companies were covered by self-funded plans but only 18% in smaller companies.
The reason for that difference is simple. Until recently, only large corporations had the resources to self-fund employee health insurance. But that’s changing.
Here’s why: When exploring options beyond traditional fully insured employee health plans, two primary self-funding models emerge: self-insurance and group captive insurance.
The chart below shows the factors that set them apart.
| Feature | Self-Insurance | Self-Funding with Captive Insurance |
| Funding Approach | Employers fund healthcare costs directly through a dedicated bank account. | Combines self-funding with shared risk by pooling resources with other businesses. |
| Ideal For | Large companies with substantial financial reserves and ability to absorb high-cost risks. | Small and midsize companies seeking cost predictability and stability. |
| Risk Management | Employers typically purchase stop-loss insurance to protect against catastrophic claims. | Includes distributed stop-loss coverage to minimize volatility and financial exposure across all member companies. |
| Cost Predictability and Stability | Costs can vary significantly based on claims incurred, leading to potential financial volatility. | Shared risk and stop-loss coverage provide more predictable and stable costs for businesses of varying sizes. |
Self-insurance requires businesses to independently fund healthcare costs, making it most suitable for large companies with high risk tolerance and financial reserves.
Self-funding with captive insurance pools resources among businesses to share risk, providing cost stability, transparency, and stop-loss protection for small to midsize companies.
With a captive self-funded model, small to midsize companies can now self-insure with the confidence of the Fortune 500s.
The Advantages of Captive Insurance for Small Businesses
Why do more small and midsize businesses prefer group captives over pure self-insurance?
Captive insurance delivers:
- Risk sharing. Share risks with like-sized companies, reducing the financial impact of large claims.
- Cost savings. Access economies of scale, resulting in lower overall costs.
- Flexibility and control. Design healthcare plans tailored to specific needs, including wellness incentives and preferred provider networks.
- Transparency. Direct access to claims data enables informed decision-making and healthcare cost-containment strategies.
- Return on unused premiums. Members receive refunds of unused funds in the captive pool in the form of annual distributions, unlike traditional fully insured plans.
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Partnering With Roundstone
Roundstone goes beyond offering innovative insurance models. As the pioneer of the group medical captive model, we’ve delivered unmatched value through a transparent, client-focused approach to health insurance since 2005.
With in-house underwriting, exceptional support teams, and strategic cost-containment measures, Roundstone ensures your business has the tools to achieve sustainable cost control and enhance employee well-being​​.
By empowering businesses with tools like the CSI Dashboard and cost containment partners, we guarantee your company will save money while maintaining top-tier benefits for your employees.
Ready To Take Control of Your Healthcare Expenses?
Contact Roundstone today to discover how a group captive can provide predictable costs, exceptional employee benefits, and real savings for your business.
1Source: WISG, 2023 Employer Health Benefits Annual Survey from Kaiser Family Foundation (KFF), WISG.
