<\/p>\n
Long-term strategic planning may be the only way forward for most small to midsize businesses. Following are three reasons why.<\/p>\n
<\/p>\n
Healthcare Expenses Keep Rising<\/strong><\/h3>\n <\/p>\n
Year after year, healthcare costs soar well past the rate of inflation and workers\u2019 earnings. There are many reasons for that, including:<\/p>\n
<\/p>\n
-Not enough competition in the industry<\/strong>. The six largest insurance companies own the majority of the market<\/a><\/span>. This inhibits competition and limits the options of most groups.<\/p>\n <\/p>\n
-Staggering insurance company profits and CEO compensation.<\/strong> In 2020, each of the country\u2019s top five health insurance companies made billions in profits<\/a><\/span>. The CEOs of the top eight companies made a combined total of more than $143.5 million in total compensation in 2018<\/span>.<\/a><\/p>\n <\/p>\n
-Skyrocketing pharmacy costs<\/strong>. In the three years from 2016 to 2019, the cost of prescription drugs rose 36%<\/span><\/a>. In 2019, the average total compensation for CEOs in the largest pharmaceutical companies averaged $7.8 million<\/span><\/a>.<\/p>\n <\/p>\n
-Lack of data and cost transparency<\/strong>. It\u2019s very difficult for consumers to get consistent pricing information from hospitals or insurance companies. For this reason, few consumers shop around for their healthcare \u2013 or even understand their medical bills. This creates a climate where insurance companies are all but immune from consumer market checks.<\/p>\n <\/p>\n
You Need a Good Benefits Package to Attract and Retain Top Talent<\/strong><\/h3>\n <\/p>\n
![\"Group](\"https:\/\/roundstoneinsurance.com\/excelsior\/wp-content\/uploads\/2021\/08\/group-shaking-hands.jpg\")
<\/p>\n
<\/p>\n
Increasingly, finding and keeping good employees is challenging for small to midsize businesses. Besides competitive pay and work environment, prospective employees also expect a strong benefits package. Providing those benefits is getting harder every year.<\/p>\n
<\/p>\n
The average insurance premium for a family plan has gone up 55% over the past 10 years. At the same time, wages have increased only 26%<\/a><\/span>. Many smaller companies don\u2019t have the finances to assume this increasing burden themselves and are forced to shift all or a portion of these increases onto their employees.<\/p>\n <\/p>\n
But this option is becoming less and less tenable as increases in premiums are outstripping inflation. What\u2019s more, many employees are bringing home less money each year as the increase in their share of their health insurance premiums grows more quickly than their earnings.<\/p>\n
<\/p>\n
According to the Kaiser Family Foundation<\/span> (KFF), employee share of their health insurance benefits has gone up 80% in the past 10 years. Not surprisingly, employees are becoming unwilling or unable to take on any more of that expense. It\u2019s clear that the market needs a better alternative.<\/p>\n <\/p>\n
You Need Cost-Containment Options<\/strong><\/h3>\n <\/p>\n
In the past 40 years, healthcare spending in the U.S. has increased 6-fold<\/a><\/span>, from $1,848 per capita In 1970 to $11,582 in 2019 (in constant 2019 dollars). In 2022, healthcare costs are projected to increase another 6%.<\/p>\n <\/p>\n
What\u2019s more, the average premium for a covered employee in 2020 was $7,470, while family coverage averaged $21,342, according to KFF<\/span>. And these rates continue to rise every year.<\/p>\n <\/p>\n
With traditional fully insured plans, companies can only react to annual premium increases. But for the long-term health of your business, you need to be proactive about how you spend your health benefit dollars by using data and analytics to spot inefficiencies and areas to optimize plan utilization. Cost containment and well-being programs can be used to fight rising drug costs and stop unnecessary expense from getting out of control.<\/p>\n
<\/p>\n
Self-Funded Captive Group Insurance Is the Solution<\/strong><\/h2>\n <\/p>\n
![\"Cost\"](\"https:\/\/roundstoneinsurance.com\/excelsior\/wp-content\/uploads\/2021\/08\/cost.jpg\")
<\/p>\n
<\/p>\n
For decades, over 90% of large corporations have used a self-funding model to manage the spiraling costs of employee health benefits, but smaller companies haven\u2019t had the resources and scale to take advantage of the same approach.<\/p>\n
<\/p>\n
In the past decade, a new option for health insurance is changing that reality and enabling small to midsize businesses to consider self-funding as part of their long-term financial strategies.<\/p>\n
<\/p>\n
What Is Self-Funding?<\/strong><\/h3>\n <\/p>\n
With self funding, as the name suggests, a company pays the medical expenses of its covered employees themselves rather than relying on an insurance carrier. In this way, they avoid paying premiums to insurance companies, who make staggering profits from traditional, fully-funded insurance plans.<\/p>\n
<\/p>\n
Large corporations realize considerable savings by paying their employees\u2019 health claims themselves and keeping unspent premium funds at the end of the year \u2014 funds that would otherwise be profit for an insurance carrier.<\/p>\n
<\/p>\n
So, while self-funding is not a new idea, it hasn\u2019t been feasible for most small to midsize businesses until the introduction of Roundstone\u2019s medical group captive in 2005.<\/p>\n
<\/p>\n
What Is Medical Captive Insurance?<\/strong><\/h3>\n <\/p>\n
Captive insurance works by minimizing risk in a self-funded plan. With a medical captive, companies band together to form a health insurance pool to reduce the cost of their medical benefit spend.<\/p>\n
<\/p>\n
The volume of employee health claims from year to year is unpredictable. Some years, a company will have a relatively low claims expense, and their premiums will far exceed the amount the insurance paid out in claims. The insurance company keeps the difference as profit.<\/p>\n
<\/p>\n
Other years, a company\u2019s health claims can be very high and often result in a premium increase the following year. Just one high claims year can devastate a small company.<\/p>\n
<\/p>\n
Either way, the company loses.<\/p>\n
<\/p>\n
However, when those companies join together to form a captive group, the risk of a bad claims year is spread over a larger pool, resulting in less volatility and lower healthcare expenses for all members of the group.<\/p>\n
<\/p>\n
Medical captive insurance plans offer several ways that small companies can control where and how most of their employees\u2019 premium funds are spent:<\/p>\n
<\/p>\n
Cost savings<\/strong>. As members of the captive, small to midsize businesses keep their unspent premium funds. If they have a high claims year, they are protected by the performance of the pool and still receive money back from unspent captive premium. What\u2019s more, because they\u2019re not at the mercy of a traditional fully insured carrier, they don\u2019t receive an outrageous premium increase if they do have one bad year.<\/p>\n <\/p>\n
Low fixed rates<\/strong>. With fully insured plans, 100% of your premium cost is fixed. That means that you have no control over how your premium dollars are spent. The insurance company does what it wants to pay for and keeps 100% of the profits in years that your claims cost less than you paid in premium.<\/p>\n <\/p>\n
With captive groups, however, fixed rates are typically 15%. The increased variable spend gives you more opportunities to save money, and you\u2019ll keep any remaining funds in your claims bank account at the end of the plan year.<\/p>\n
<\/p>\n
Flexibility<\/strong>. Roundstone\u2019s captive members are able to choose their own third-party administrator (TPA) and pharmacy benefits manager (PBM). More importantly, they are able to decide for themselves how to spend their premium funds, allowing them to initiate cost-containment strategies to improve their employees\u2019 health and wellbeing while lowering healthcare expenses.<\/p>\n <\/p>\n
Why Include Roundstone in Your Long-Term Strategy?<\/strong><\/h3>\n <\/p>\n
![\"Affordable](\"https:\/\/roundstoneinsurance.com\/excelsior\/wp-content\/uploads\/2021\/08\/affordable-healthcare-ahead.jpg\")
<\/p>\n
<\/p>\n
Roundstone offers many advantages over other captive programs. These advantages include:<\/p>\n
<\/p>\n
Experience<\/strong>. Roundstone, as the original group medical captive, has been managing group captives for over a decade. We know how to underwrite risk effectively and advise businesses like yours on how to make the most of cost-containment options.<\/p>\n <\/p>\n
Freedom of choice<\/strong>. We work with you to design a custom plan that meets your specific goals. You have the option to choose your TPA and PBM. You also get to decide on incentives and cost-containment measures that make sense for your workers.<\/p>\n <\/p>\n
Data transparency<\/strong>. As a member of a Roundstone group captive, you will benefit from our commitment to full disclosure of information. You will have access to all of your claims data with our CSI Dashboard <\/a><\/span>so you can see exactly how your healthcare funding is being spent and if your plan is being utilized as expected.<\/p>\n <\/p>\n
In addition, our data experts will help you to proactively analyze and interpret this data to identify cost-containment opportunities.<\/p>\n
<\/p>\n
Guaranteed cost savings<\/strong>. On average, Roundstone captive members save 20% per year in health insurance costs. We guarantee that you will save money overall in the first four years (or we\u2019ll make up the difference). Two-thirds of our clients will even save enough money over those initial four years to fully fund their fifth year of claims.<\/p>\n <\/p>\n
Premium reimbursement<\/strong>. Our premium reimbursement program sets us apart from other captive group managers by providing a second source of savings to our members. In our layered approach to funding your plan, a percentage of your premiums is put into the captive\u2019s pooled funds to cover claims as a group (over a pre-determined level), and a percentage is set aside for stop loss coverage, which covers high-cost claims.<\/p>\n <\/p>\n
At the end of each claim year, money left over in the group\u2019s pooled premium fund is returned to our members via a distribution check<\/a><\/span> delivered by your advisor. Your distribution is paid out on a pro rata basis.<\/p>\n <\/p>\n
Personal service<\/strong>. At Roundstone, we are focused on building relationships with our members. We are committed to helping you create a plan that meets the specific needs of your company and your employees. And we\u2019ll take the time to be sure you understand exactly what you\u2019re buying and why.<\/p>\n <\/p>\n
<\/h2>\nThe Future of Small Business Health Insurance<\/strong><\/h2>\n <\/p>\n
With the volatility of the American insurance industry, long-term strategizing is more important than ever for small and midsize businesses. With each new year bringing higher premiums, self-funding as part of a medical group captive is an increasingly attractive option for many companies. For some, it\u2019s become a necessity.<\/p>\n
<\/p>\n
With Roundstone\u2019s medical captive insurance plans, your company can self-fund and save money the same way large corporations do. And with our commitment to cost savings, flexibility, and service to our clients, nobody does medical captive groups better than Roundstone.<\/p>\n
<\/p>\n
For More Information<\/strong><\/h2>\n <\/p>\n
For more about why Roundstone is the best choice for your company\u2019s long-term financial strategy. Want to find out if you’re a good fit for a self-funded plan? Our checklist helps you decide.<\/p>\n
<\/p>\n
Download Now<\/span><\/strong><\/a><\/p>\n <\/p>\n
Request a Proposal<\/strong><\/h2>\n <\/p>\n
<\/p>\n
-Staggering insurance company profits and CEO compensation.<\/strong> In 2020, each of the country\u2019s top five health insurance companies made billions in profits<\/a><\/span>. The CEOs of the top eight companies made a combined total of more than $143.5 million in total compensation in 2018<\/span>.<\/a><\/p>\n <\/p>\n -Skyrocketing pharmacy costs<\/strong>. In the three years from 2016 to 2019, the cost of prescription drugs rose 36%<\/span><\/a>. In 2019, the average total compensation for CEOs in the largest pharmaceutical companies averaged $7.8 million<\/span><\/a>.<\/p>\n <\/p>\n -Lack of data and cost transparency<\/strong>. It\u2019s very difficult for consumers to get consistent pricing information from hospitals or insurance companies. For this reason, few consumers shop around for their healthcare \u2013 or even understand their medical bills. This creates a climate where insurance companies are all but immune from consumer market checks.<\/p>\n <\/p>\n <\/p>\n <\/p>\n Increasingly, finding and keeping good employees is challenging for small to midsize businesses. Besides competitive pay and work environment, prospective employees also expect a strong benefits package. Providing those benefits is getting harder every year.<\/p>\n <\/p>\n The average insurance premium for a family plan has gone up 55% over the past 10 years. At the same time, wages have increased only 26%<\/a><\/span>. Many smaller companies don\u2019t have the finances to assume this increasing burden themselves and are forced to shift all or a portion of these increases onto their employees.<\/p>\n <\/p>\n But this option is becoming less and less tenable as increases in premiums are outstripping inflation. What\u2019s more, many employees are bringing home less money each year as the increase in their share of their health insurance premiums grows more quickly than their earnings.<\/p>\n <\/p>\n According to the Kaiser Family Foundation<\/span> (KFF), employee share of their health insurance benefits has gone up 80% in the past 10 years. Not surprisingly, employees are becoming unwilling or unable to take on any more of that expense. It\u2019s clear that the market needs a better alternative.<\/p>\n <\/p>\n <\/p>\n In the past 40 years, healthcare spending in the U.S. has increased 6-fold<\/a><\/span>, from $1,848 per capita In 1970 to $11,582 in 2019 (in constant 2019 dollars). In 2022, healthcare costs are projected to increase another 6%.<\/p>\n <\/p>\n What\u2019s more, the average premium for a covered employee in 2020 was $7,470, while family coverage averaged $21,342, according to KFF<\/span>. And these rates continue to rise every year.<\/p>\n <\/p>\n With traditional fully insured plans, companies can only react to annual premium increases. But for the long-term health of your business, you need to be proactive about how you spend your health benefit dollars by using data and analytics to spot inefficiencies and areas to optimize plan utilization. Cost containment and well-being programs can be used to fight rising drug costs and stop unnecessary expense from getting out of control.<\/p>\n <\/p>\n <\/p>\n <\/p>\n For decades, over 90% of large corporations have used a self-funding model to manage the spiraling costs of employee health benefits, but smaller companies haven\u2019t had the resources and scale to take advantage of the same approach.<\/p>\n <\/p>\n In the past decade, a new option for health insurance is changing that reality and enabling small to midsize businesses to consider self-funding as part of their long-term financial strategies.<\/p>\n <\/p>\n <\/p>\n With self funding, as the name suggests, a company pays the medical expenses of its covered employees themselves rather than relying on an insurance carrier. In this way, they avoid paying premiums to insurance companies, who make staggering profits from traditional, fully-funded insurance plans.<\/p>\n <\/p>\n Large corporations realize considerable savings by paying their employees\u2019 health claims themselves and keeping unspent premium funds at the end of the year \u2014 funds that would otherwise be profit for an insurance carrier.<\/p>\n <\/p>\n So, while self-funding is not a new idea, it hasn\u2019t been feasible for most small to midsize businesses until the introduction of Roundstone\u2019s medical group captive in 2005.<\/p>\n <\/p>\n <\/p>\n Captive insurance works by minimizing risk in a self-funded plan. With a medical captive, companies band together to form a health insurance pool to reduce the cost of their medical benefit spend.<\/p>\n <\/p>\n The volume of employee health claims from year to year is unpredictable. Some years, a company will have a relatively low claims expense, and their premiums will far exceed the amount the insurance paid out in claims. The insurance company keeps the difference as profit.<\/p>\n <\/p>\n Other years, a company\u2019s health claims can be very high and often result in a premium increase the following year. Just one high claims year can devastate a small company.<\/p>\n <\/p>\n Either way, the company loses.<\/p>\n <\/p>\n However, when those companies join together to form a captive group, the risk of a bad claims year is spread over a larger pool, resulting in less volatility and lower healthcare expenses for all members of the group.<\/p>\n <\/p>\n Medical captive insurance plans offer several ways that small companies can control where and how most of their employees\u2019 premium funds are spent:<\/p>\n <\/p>\n Cost savings<\/strong>. As members of the captive, small to midsize businesses keep their unspent premium funds. If they have a high claims year, they are protected by the performance of the pool and still receive money back from unspent captive premium. What\u2019s more, because they\u2019re not at the mercy of a traditional fully insured carrier, they don\u2019t receive an outrageous premium increase if they do have one bad year.<\/p>\n <\/p>\n Low fixed rates<\/strong>. With fully insured plans, 100% of your premium cost is fixed. That means that you have no control over how your premium dollars are spent. The insurance company does what it wants to pay for and keeps 100% of the profits in years that your claims cost less than you paid in premium.<\/p>\n <\/p>\n With captive groups, however, fixed rates are typically 15%. The increased variable spend gives you more opportunities to save money, and you\u2019ll keep any remaining funds in your claims bank account at the end of the plan year.<\/p>\n <\/p>\n Flexibility<\/strong>. Roundstone\u2019s captive members are able to choose their own third-party administrator (TPA) and pharmacy benefits manager (PBM). More importantly, they are able to decide for themselves how to spend their premium funds, allowing them to initiate cost-containment strategies to improve their employees\u2019 health and wellbeing while lowering healthcare expenses.<\/p>\n <\/p>\n <\/p>\n <\/p>\n Roundstone offers many advantages over other captive programs. These advantages include:<\/p>\n <\/p>\n Experience<\/strong>. Roundstone, as the original group medical captive, has been managing group captives for over a decade. We know how to underwrite risk effectively and advise businesses like yours on how to make the most of cost-containment options.<\/p>\n <\/p>\n Freedom of choice<\/strong>. We work with you to design a custom plan that meets your specific goals. You have the option to choose your TPA and PBM. You also get to decide on incentives and cost-containment measures that make sense for your workers.<\/p>\n <\/p>\n Data transparency<\/strong>. As a member of a Roundstone group captive, you will benefit from our commitment to full disclosure of information. You will have access to all of your claims data with our CSI Dashboard <\/a><\/span>so you can see exactly how your healthcare funding is being spent and if your plan is being utilized as expected.<\/p>\n <\/p>\n In addition, our data experts will help you to proactively analyze and interpret this data to identify cost-containment opportunities.<\/p>\n <\/p>\n Guaranteed cost savings<\/strong>. On average, Roundstone captive members save 20% per year in health insurance costs. We guarantee that you will save money overall in the first four years (or we\u2019ll make up the difference). Two-thirds of our clients will even save enough money over those initial four years to fully fund their fifth year of claims.<\/p>\n <\/p>\n Premium reimbursement<\/strong>. Our premium reimbursement program sets us apart from other captive group managers by providing a second source of savings to our members. In our layered approach to funding your plan, a percentage of your premiums is put into the captive\u2019s pooled funds to cover claims as a group (over a pre-determined level), and a percentage is set aside for stop loss coverage, which covers high-cost claims.<\/p>\n <\/p>\n At the end of each claim year, money left over in the group\u2019s pooled premium fund is returned to our members via a distribution check<\/a><\/span> delivered by your advisor. Your distribution is paid out on a pro rata basis.<\/p>\n <\/p>\n Personal service<\/strong>. At Roundstone, we are focused on building relationships with our members. We are committed to helping you create a plan that meets the specific needs of your company and your employees. And we\u2019ll take the time to be sure you understand exactly what you\u2019re buying and why.<\/p>\n <\/p>\n <\/p>\n With the volatility of the American insurance industry, long-term strategizing is more important than ever for small and midsize businesses. With each new year bringing higher premiums, self-funding as part of a medical group captive is an increasingly attractive option for many companies. For some, it\u2019s become a necessity.<\/p>\n <\/p>\n With Roundstone\u2019s medical captive insurance plans, your company can self-fund and save money the same way large corporations do. And with our commitment to cost savings, flexibility, and service to our clients, nobody does medical captive groups better than Roundstone.<\/p>\n <\/p>\n <\/p>\n For more about why Roundstone is the best choice for your company\u2019s long-term financial strategy. Want to find out if you’re a good fit for a self-funded plan? Our checklist helps you decide.<\/p>\n <\/p>\n Download Now<\/span><\/strong><\/a><\/p>\n <\/p>\n <\/p>\nYou Need a Good Benefits Package to Attract and Retain Top Talent<\/strong><\/h3>\n
<\/p>\nYou Need Cost-Containment Options<\/strong><\/h3>\n
Self-Funded Captive Group Insurance Is the Solution<\/strong><\/h2>\n
<\/p>\nWhat Is Self-Funding?<\/strong><\/h3>\n
What Is Medical Captive Insurance?<\/strong><\/h3>\n
Why Include Roundstone in Your Long-Term Strategy?<\/strong><\/h3>\n
<\/p>\n<\/h2>\n
The Future of Small Business Health Insurance<\/strong><\/h2>\n
For More Information<\/strong><\/h2>\n
Request a Proposal<\/strong><\/h2>\n