How Captives Work

Captives offer a different approach to healthcare benefits. Employers looking for control, transparency and cost savings find the perfect fit with Roundstone’s medical captive solution. Captive insurance is simply another form of self-insurance that has found significant appeal as an alternative funding strategy to traditional health insurance. In traditional insurance you pay a fixed premium and the insurance company assumes the risk of medical claims from the employee benefit plan. That means if your plan performs better than expected, your carrier pockets the profits, but if it performs worse, you see sky-rocketing double-digit increases.

In self-insurance, employers assume a portion of the claim cost by paying for a share of each claim as they are incurred. In exchange, the employer improves its cash flow, claim information received and control over the plan. It’s a misconception that only large corporations are candidates for self-insurance. Roundstone will show you how captives make self-insurance work for even small and mid-size employers.

Captive Fundamentals

Understanding Captives

For years, large companies have used self-insurance strategies to reduce insurance costs, lower their risk, and optimize tax savings. Thanks to Roundstone’s captive management services and group captive programs, these benefits are now available to agencies, middle market companies, and groups & associations.

An organization can realize many benefits by using a captive but each one comes down to a greater degree of control. When you establish a captive, YOU control costs, YOU control cash flow, YOU control claims, and YOU control risk.

With a captive you have the freedom to:

  • Pool risk with other employers in your captive
  • Pay amounts you determine by writing the policies and setting premium
  • Deduct premium payments from your taxes
  • Collect payments and invest them for future claim payouts
  • Influence insurance coverage including claims handling procedures
  • Profit from improved claim performance, unused funds are paid to the owner of the captive – YOU!

Creating a Captive
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Why deal with other captive management firms who charge high fees just to get started? There are NO upfront fees when you choose Roundstone’s turnkey programs. Should you choose to develop your own captive program and not take advantage of our existing captive programs, the captive organization process is not as complicated as some may lead you to believe—but you do need an experienced partner to guide you. Below you’ll find information about Roundstone’ s cost and fee structure, as well as an outline of the steps that we’ll take to organize your own captive. Remember, Roundstone offers turnkey captive solutions with fronting, reinsurance, claim’s management, policy administration and captive facilities all ready and available.

So how much does it cost to organize a captive? The short answer: It’s FREE with us.
The long answer:

Roundstone does not charge any start-up fees to organize your own captive. Some captive managers charge up-front organizational fees regardless of program implementation ($175 – $250,000). This approach allows other captive managers to make money regardless of the programs’ implementation or success. Roundstone’s approach aligns our organization’s financial incentive with yours. We are fully vested in the success of the program as we do not get paid until premium is sent to your captive facility.

Unlike other captive advisors, Roundstone’s services and support do not start and end with the establishment of a captive insurance program. We offer turnkey plan management as well.

Choosing a Captive

There’s no one-size-fits-all solution for captives. There are many types of programs, each structured differently. That’s why it’s important to find a partner, like Roundstone, who can guide you through all your options to find the right fit. Types of Programs

Hear from our Clients

We’re not in the business of marriage counseling, so if a captive isn’t the right fit for you we’re not going to recommend one. Roundstone will help you understand if captive insurance is a good match and, if so, which structure and program works best. Hear from our clients who’ve realized a captive solution could help their business. Success Stories