Who’s Who in Your Group Captive Insurance Plan?

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  • Understanding who’s who in your group captive insurance plan is essential to choosing the right partner for each role.
  • Fully insured carriers give you no options regarding these important elements of your coverage plan.
  • A group captive plan from Roundstone gives you the freedom to choose your own TPA, PBM, network provider, and advisor to receive the best coverage possible.
  • Building a customized group captive health insurance plan allows you to find the right coverage at the best price.



Moving to a group captive insurance plan from a fully insured health plan may seem like a big change for most employers. Although you know it’s the best option for your employees, you may be unclear as to how the various parts of a group captive plan fit together to offer you great coverage and cost-effective solutions to health insurance. You may also be wondering how much work is involved for the employer to manage the health plan.


Group captives are made up of key players such as Third-Party Administrators (TPA), Pharmacy Benefits Managers (PBM), reinsurers, networks, and advisors who work seamlessly together to provide a customized, affordable health insurance plan that meets your company’s needs.


The “seamless” part is important to understand — the employer does not have to do more work to coordinate the players on the group captive team for self-funded health insurance. Generally speaking, the benefits advisor and the TPA manage claims, similar to the experience in a fully insured plan.

With group captive plan from Roundstone, you have flexibility and the freedom to choose who fills each of these roles. Understanding who’s who in your group captive insurance plan is vital to its success.


Third-Party Administrators (TPAs)


A Third-Party Administrator (TPA) is an outsourced claims processing and benefits managing company. A TPA handles your insurance operations on a day-to-day basis, performing tasks such as filing health insurance claims, receiving reimbursements, enrolling new members, and managing other employee benefits.


The right TPA efficiently takes care of the administrative side of your group captive’s health insurance, saving you time and money.


With a fully insured plan, your operations are handled by the insurance company. While this may seem more straightforward, the downside is that you are locked into their terms and conditions, which usually include opaque operations fees, unwarranted (and unexplained) premium increases, and high pharmacy costs.


With a group captive plan from Roundstone, you can work with your advisor to find a TPA that fits your needs. TPAs often specialize in specific services or work for a group captive of a certain size. With the ability to choose, you can pick a TPA that matches your needs and has the right background for your organization’s size and make-up.


The experience to you and your employee plan members is exactly the same as with a fully insured approach — only your TPA is handling operations instead of the carrier.




Pharmacy Benefits Managers (PBMs)


A Pharmacy Benefits Manager (PBM) is an entity that organizes and administers prescription drug benefits for your group captive plan. They negotiate with pharmacies, drug wholesalers, and prescription drug manufacturers to obtain medications for your employees within your contracted price range.


Ideally, a PBM obtains savings on these medications and uses a pass-through model to pass the savings onto the insured members.


In a traditional, fully insured setup, you don’t get to choose your PBM. Like many elements of fully insured healthcare, you are locked into using the PBM your insurance company chooses.


One of the biggest problems with not having a choice of PBM is that most traditional PBMs work for the mega carriers. They are not transparent in their dealings and often keep any savings they negotiate with drug companies as profit rather than passing them on to you.


With a group captive plan, you can use a PBM that saves you money by reducing pharmacy spending for your company. Roundstone can partner you with transparent and pass-through PBMs that are open about how they operate (and pass on all savings to you).


These PBMs use multiple techniques to save you money on pharmacy costs, including:


  • Clear, direct contracts
  • Predictable administration fees
  • Rebate programs
  • Access to pharmacy networks and specialty pharmacies
  • Case management
  • Prescription delivery services
  • Co-pay assistance programs
  • Negotiated pricing
  • Fraudulent prescription monitoring
  • Advice on which medications are covered


The ability to choose your own PBM through your group captive plan with Roundstone is also beneficial because you provide your employees with better overall care. They can more easily access the medication they need to manage their health conditions, which leads to fewer emergency room visits and health issues over time. This gives you a happier, healthier workforce as well as long-term financial gain.


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Reinsurers (Stop-Loss Insurance)


Obtaining the right stop-loss policy or re-insurance is a critical part of group captive plans. A stop-loss policy is an insurance plan that covers claims above your chosen employer deductible, which decreases claims volatility and lowers costs for everyone in the group.


Stop loss reinsurance is put in place to protect your group captive from both a single person’s high claims and your total maximum or aggregate costs. This transfers the risk from the group captive members to the reinsurer so that if this situation occurs, your group isn’t held liable for those claims. You don’t have to guess whether you need specific or aggregate stop-loss coverage — your policy can include both.


Specific Stop-Loss Insurance

This type of reinsurance protects your group captive against risk when an individual has higher-than-average claims (such as for a cancer diagnosis). Specific stop-loss insurance is crucial for protection against a high single claim. It ensures that your bottom line is protected if you have a few members who require significant care.


Aggregate Stop-Loss Insurance

Aggregate stop-loss insurance protects your group captive if the aggregate, or total, claims amount for all covered employees exceeds your max cost limit. It puts a cost limit on the total claims amount during a contract period. This provides protection if you have lots of members who access care frequently.


A policy that combines specific and aggregate stop-loss coverage provides you with peace of mind in the event of both high-dollar claims and an increased number of claims by transferring risk to the insurer. They are an essential part of an effective group captive plan, and the Roundstone team offers a stop-loss policy that works for you.




A health insurance network refers to the providers, vendors, and facilities contracted to provide health care services for the insured. When an insured person receives care from an in-network provider or facility, they are typically responsible for a co-pay and a small portion of the bill. If they seek care outside the contracted network, the out-of-network cost is much higher to the insured person and their employer.


Under fully insured plans, you have no say in which providers and facilities are in your network. The insurance company makes the contracting decisions, and when you need to see a provider, you have to find one within the network to avoid costly repercussions.


This can limit the available care options for insured members, and results in out-of-pocket expenses in cases when specialists or special facilities are unavailable in-network.


By working with your advisor, who works closely with Roundstone’s underwriters and Cost Savings Investigators (CSI) team, you can find the right network that allows you to obtain the best care from high-quality providers and facilities in your area.


You can focus on obtaining providers specializing in conditions affecting your group members. Look for coverage that can get you into specialized facilities rather than local hospitals that may be unable to treat certain conditions.


Direct Primary Care (DPC) is another model that you can evaluate as an alternative to fee-for-service billing. There are many great options that can deliver high-quality primary care through a local network, simple plan design with no deductible, free primary care, and predictable co-pays. Your advisor and Roundstone will help you determine if DPC is a good fit.


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Benefits Advisors/Brokers


Traditionally, an insurance benefits broker works in an advisory capacity to help you enroll in a healthcare plan. A broker is a liaison between you and the insurance company. They give you advice about which plan is a better option for your needs and aid you in signing up for coverage.


Working with a broker when you have a fully insured healthcare plan can feel like a transactional relationship. They meet with you once a year — a few months before your renewal period — to pass on the renewal offer from your insurance company.


If you are unhappy with the offer, they likely can’t give you any insight into why prices have changed, and you are limited to “shopping” around for a better deal from the BUCAA mega carriers (Blue Cross and Blue Shield, UnitedHealth Group, Cigna, Aetna, and Anthem).


At Roundstone, you partner with an insurance advisor rather than a broker. Our network of trusted advisors works closely with Roundstone’s team of relationship managers to obtain the best rates and cost-containment solutions for your group captive plan. They are working for your best interest.


Your advisor can help you change some elements of your plan at any time. In many cases, there’s no need to wait for your renewal date. Many services are available to you throughout the year, not only when renewal time comes around.


Build Your Customized Healthcare Plan With Roundstone


Every element of your group captive health insurance plan from Roundstone works together as part of a self-funded health insurance solution. Understanding the who’s who in your group captive plan allows you to fill each role based on your company’s specialized coverage needs.


With Roundstone, you can build a customized healthcare plan that provides your employees with high-quality yet affordable group health insurance.


Speak with a representative at Roundstone to find out more about how group captive insurance may be the right healthcare insurance option for your small to midsize business.


Request a proposal and benchmark review today.


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