Funding Medical Stop-Loss in Captives: What You Need to Know (White Paper)

Spring Medical Stop Loss Captive White Paper 2016Healthcare reform, increasing costs, lazered coverage and leveraged trends are causing many employers to reconsider their stop-loss options. These include employers who are fully insured considering a move to self-insurance and current self-insured employers.

Healthcare reform mandates have led to many employers to review the cost of their medical insurance programs including funding alternatives and the need for additional stop-loss coverage. Deciding to insure medical stop-loss and fund it in a captive has proven to be a great way for employers who self-fund their health coverage to add a layer of protection from excessively high individual or aggregate health claims and meet ACA requirements.

Medical stop-loss is not considered first dollar health insurance benefit and thus stop-loss captives are not subject to Department of Labor approval in the United States like many benefits are. Also, by funding stop-loss in a captive, an employer gains access to lower-cost reinsurance they might otherwise not be eligible for as a direct purchaser.

This white paper explains how medical stop-loss captives work, the common types of medical stop-loss captives and who should consider one. We hope you find it helpful and enlightening. If you have any questions at all, please don’t hesitate to contact our captive consulting team. All of our contact information is listed on the final page or this paper.

To get your FREE copy of this white paper, please fill out the form below:

Spring Shortlisted For 2 Prestigious Captive Insurance Awards

captive insurance awards

Image Credit: Captive Review

We were excited to find out that Spring has made the “short list” for two 2016 US Captive Services Awards.

The awards, presented by the highly regarded industry publication Captive Review, “recognize and reward those providers of captive insurance products and services who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months.”

This year, Spring is nominated for Actuarial Firm of the Year and Employee Benefits Consultant.

In the past, Spring has been the recipient of a number of US Captive Services Awards including Actuarial Firm of the Year, Employee Benefits Consultant and Captive Professional of the Year.

The 2016 US Captive Services Awards winners will be announced on Monday, August 8th at the Hilton in Burlington, Vermont during the Vermont Captive Insurance Association’s (VCIA) annual conference. Spring’s Managing Partner, Karin Landry, and Senior Partner, John Cassell will also be presenters at the VCIA conference this year. We will have more info on that to come soon in an additional post.

The full shortlist can be found here. More information about the US Captive Services Awards can be found here.

Spring Partner to Present at DMEC 2016

dmec 2016DMEC is widely considered to be one of the premier human resource industry gatherings. This year, we are fortunate to have Spring Partner Karen English along with Jane Ryan from the Mayo Clinic, Trina Mouton from CenterPoint Energy and Patrick Leary, a health and productivity professional, giving a presentation titled “Ready or Not Workers’ Comp- Here We come!” Attendees of this session will learn how that risk can be avoided, and ultimately how to successfully bring risk management and benefits together for an integrated approach to disability, workers’ compensation, and leave at their organization.

This year’s DMEC conference will run from July 18-21 at The Hilton New Orleans Riverside.

If you are heading to the DMEC conference, be sure to stop by our booth #401 and sayhi to Karen and fellow Spring Partner Teri Weber. We will be handing out plenty of goodies throughout the day and you will not believe what we are giving away this year as a raffle prize!

More details about the event, including registration information can be found here.

The Benefits of Captives for Small and Mid-Sized Businesses (White Paper)

Captives for Small Mid Sized Businesses While they were once almost exclusively risk funding mechanisms for the largest of corporations, captives have evolved over the years and a suite of captive funding options have been developed to assist businesses of all sizes.

In this paper, we seek to educate you about captive insurance, the history, benefits and the options available to small and mid-sized companies. We will explain what a cell captive is and how it can be an excellent entry point for a company into captive insurance. Finally, we will explore the next steps for your business if you decide that captive funding of your company’s risk might be a good choice and would like to explore it further.

We hope you find this paper helpful and enlightening. If you have any questions at all, please don’t hesitate to contact our captive consulting team. All of our contact information is listed on the final page or this paper.

To get your FREE copy of this white paper, please fill out the form below:

12 Helpful Captive Insurance Statistics and Facts

captive insurance statisticsCaptive insurance companies have been a risk funding option for decades, but the captive insurance industry has really grown significantly in size and scope over the past twenty years. What used to be a somewhat niche property & casualty funding option for the largest of corporations, is now a viable finance vehicle for business of all sizes covering all types of business risk, including employee benefits.

So how far has the captive insurance company come? Here are some helpful captive insurance statistics and facts that we have been able to uncover during the course of our consulting work. We will try to update this post fairly regularly. All stats and facts are linked to their original source, where appropriate and source dates are included.

Please note that some captive insurance stats are easier to dig up than others, so this is our best attempt to capture the most up to date information as possible using industry reports and research.

Captive Insurance Statistics

Number of captive insurers globally*:

6,939

Last checked 5/20/16


Percentage of Fortune 500 companies that have a captive:

Over 90%

Last checked 5/20/16


Number of global captive insurance domiciles:

More than 70

Last updated 3/29/16


Number of US states and territories that support captives:

35+

Last updated 2/19/15


Largest US captive domicile:

Vermont

Last checked 5/20/16


Percentage of the world’s captives that have an association with the US:

Over 75%

Last checked 5/20/16


Percentage of P&C premiums written that are written through captives:

Over 50%

Last checked 5/20/16


Percentage of global captives that are domiciled in the US:

44.6%

Last checked 5/20/16


Percentage of global captives that are domiciled in the North American offshore:

40.1%

Last checked 5/20/16


Percentage of global captives that are domiciled in Europe:

12.7%

Last checked 5/20/16


Percentage of global captives that are domiciled in the Asia-Pacific region:

2.3%

Last checked 5/20/16


Percentage of global captives that are domiciled in Canada:

0.3%

Last checked 5/20/16


10 most popular captive insurance domiciles:

Bermuda

Cayman Islands

Vermont

Utah

Anguilla

Delaware

Guernsey

Nevis

Barbados

Luxembourg

(source)

Source date: Year-end 2014


*Cell captives increase this number significantly if each cell is considered a separate captive.

11 Interesting FMLA Statistics and Facts (May 2016)

FMLA statisticsThough it has only been around for little more than two decades, the Family Medical Leave Act (FMLA) has made a very serious impact in the way employers view and administer absence management. The guidelines in which most employers have to operate within under the FMLA can be challenging, at times, as is compliance documentation, but all in all, employers do recognize that the law is an important one that does have a positive impact on the workforce.

So how much impact has the FMLA had over the years? Here are some helpful FMLA statistics and facts that we have been able to uncover during the course of our consulting work. We will try to update this post fairly regularly. All stats and facts are linked to their original source, where appropriate and source dates are included.

FMLA Statistics

Date FMLA was signed into law:

February 5, 1993


Number of times the FMLA has been used since enactment:

More than 100 million times

Last checked 5/20/16


Percentage of US private sector employees that have access to paid family leave:

12%

Last checked 5/20/16


Average percentage of the US workforce that is on FMLA leave at any point in time:

10.7%

Last checked 5/20/16


Average duration of an FMLA leave:

14.2 days

Last checked 5/20/16


Top reason for FMLA leaves:

Employee’s own health conditions

Last checked 5/20/16


Top medical condition employees take FMLA leave for:

Surgery

Last checked 5/20/16


Percentage of total FMLA leaves in the US that are due to pregnancy:

17%

Last checked 5/20/16


Top FMLA enforcement complaint to the US Department of Labor in 2015:

Termination


Number of FMLA enforcement complaints in 2015:

1,419


Percentage of employers that report complying with the FMLA has had a positive or no noticeable effect on employee absenteeism, turnover and morale:

91%

Source date: 2013


Employee Benefits and Captives: A Look Back at the Pioneers

employee benefit captiveBackground:

Back in 2000 and 2003, Columbia Energy (Columbia) and Archers Daniels Midland (ADM), respectively, became true risk pioneers as they became the first companies to gain a prohibited transaction exemption (PTE) from the US Department of Labor (DOL) to write employee benefits into their captives. Since then, a number of companies have followed suit and created captive-funded employee benefits programs.

Companies that followed Columbia and ADM on a similar funding path had the luxury of utilizing an expedited process (EXPRO) to gain their PTEs. The Columbia and ADM cases were used by the DOL as model cases by which future companies could mirror and qualify for EXPRO.

In 2014-15, EXPRO was re-instated with approvals being granted to Coca-Cola and Intel Corp. These companies’ PTE’s are the genesis of the new age EXPRO process, reinforcing the pathway for writing employee benefits in a captive.

Our Survey:

To date, more than 30 companies have successfully secured a PTE from the DOL. Our Spring research team recently set out to identify these companies and interview them to understand their experience and provide them a platform to share their story and experiences. We created a digital survey questionnaire that provided these pioneer companies a framework to collectively and objectively share their experiences and impressions of adding employee benefits to their captives. Our goal was to challenge the widely held assumption that adding employee benefits to captive is a good idea, by providing objective feedback from the pioneers as to what originally motivated them to consider heading down the path? Did they achieve the intended objectives? What has worked well…and not so well? What suggestions/advice could they offer to companies considering embarking on this path? And what does the future hold for adding new benefits to their captive? This report is a brief extrapolation of their responses.

To get your FREE copy of our survey results white paper, please fill out the form below:

Report: Cost of Long-Term Care Rises Significantly

long term careLong-term care may cost more than you think. A lot more.

A new report from Genworth Financial shows that private nursing home rooms now average $92,378 annually ($7,698 monthly). This is an increase of 1.2% from last year and close to 19% from 2011.

Semi-private nursing homes weren’t spared from cost increases either. Genworth pegged the average annual cost of a semi-private nursing home at $82,125 ($6,844 monthly), which is close to 17% more expensive than it was in 2011. Assisted living communities saw an increase of 0.8% from 2015 and now average $3,628 monthly.

So what does this all mean to you? Long-term care insurance is becoming a necessity for most Americans. It is becoming increasingly challenging for the average person to afford care as they grow older and the burden is often too much to handle for their children. There are a number of long-term care options available that will help insure you have the necessary funds available to you if you should require assistance in your golden years.

More information about Spring’s long-term care services can be found here.