Employment Transfer Letter

Many employers are faced with the rapidly rising cost of health insurance, other than payroll. The average cost for family coverage has nearly 13,000 a year. employers in large organizations are able to take control of their costs because most of them are self-insured. Since this allows for transparency, large employers can implement health programs that their real problems are.

Most mid-sized employers are fully insured and have product options that their counterparts have. They do not know what claims they have money or when their premiums go. The lack of transparency prevents them from taking control of the cost of health insurance.

So, how employers can change what they are average size? They may form what is called a program in captivity. A captive can be formed by a group of employers in an effort to reduce costs associated with providing health benefits to their employees. These employers may come from a wide variety of backgrounds, including risk retention groups existing trade associations, franchises, the companion portfolio of private equity firms, and clients of an agency or broker . employers have resorted to workers' compensation programs in captivity for years of high success.

Each prisoner can be customized with its own terms, rules of participation, and financial structure, and the typical program in captivity is 3-6 months to create depending on several variables. Launching of a captive usually requires a minimum of 3 employers, with a total of 500 employees or more.

Ideal employers should have 50-400 employees eligible for health plan business and have the financial means to bear some risk associated with their benefits plan. They must have a leading-edge management that focus on taking control of health care cost increases and are ready to lead change. They must be able to communicate with their employees on the importance of being proactive in reducing the cost of health care. Allowing small employers who were fully insured to go to a self insured plan has many potential benefits, and allows them to spread and share risks with other firms in the captive insurance program.

Employers can maintain a single plan in all states, which can potentially reduce administrative costs. Employers also have greater access to claim and behavioral data (in a manner consistent with HIPAA), which allows them to influence the activity of employees and reduce costs. They can assemble a team of stars from suppliers instead of being forced into the one-size-fits-all approach to the market fully insured. Employers may choose to remove or reduce some of the benefits mandate imposed by each state, which allows them to remove the cost of benefits potentially unnecessary. Often, the employer better than the average risk profile realizes additional savings.

To protect themselves against financial loss, most self-insured employers purchase a stop-loss policy that provides insurance against both large individual claims and aggregation of small claims. Most large employers operate self insured plans because of the benefits described above. Many medium-sized businesses wanting the benefits of a self insured plan, but do not like the compromises inherent associated with these plans. Captive programs are designed to enable employers to maintain the majority of potential savings for switching to a plan of self assured without all of the volatility of a retention policy of stop loss high

Captives do a risk and reward structure unique. Each program can be structured in captivity for a group of employers having a common bond. Every employer shall keep the losses that are predictable for her. The group of employers share losses that are unpredictable.