Doug Truax, founder and CEO of Everlong Captive Insurance, said his company is going to battle to fight traditional captive insurance models with its modified structure, which not only improved performance and transparency, but also helps businesses facing the unsustainable rising cost of health insurance.
According to an Everlong blog post, self-funding insurance plans have seen a major shift as part of a more recent trend where employers assume the financial risk for health care insurance packages provided to its employees. The onset of the COVID-19 pandemic left small to mid-sized businesses having to close – furloughing employees, rising health care costs and insurance premiums and limited resources – which left businesses needing better options available for choosing group health insurance.
"In 2021, the annual cost of employer-sponsored health insurance for family premiums increased by 4% and according to SHRM, employers can expect an increase of up to 5.2% in 2022," according to an Everlong press release.
"Your clients are at best treading water" in terms of being able to afford their health insurance policy, Truax said. The other major issue Truax discussed is the lack of transparency with the customer as prices rise. Everlong is focusing on getting money back to its customers through its self-funding captive program.
"The insurance industry is at a tipping point. This is because our traditional health insurance policies are not sustainable due to the consistent rise in prices year after year," Truax said.
Everlong offers clients its modified traditional captive model that provides an improved high performance captive stability with 100% transparency.
"We reimagined and redesigned employer-based health care by building high performance health insurance captives that break with tradition," the press release stated. "Our average stop loss since inception is just 3.6%, and members experience -6% renewals after premium return, with no risk of future lasers."
Everlong is able to achieve both high performance and stability by capping each cell at 50 owner-employers per cell. This allows for each owner-employer to have less volatility and risk exposure with more stability in premium costs due to the risk being evenly spread out.
"It should be no surprise then why rate caps are used most by the largest captive managers...They will accept any employer and one-size-fits-all because they’ve commoditized their captive structure," according to an Everlong blog post. "We believe in innovation and continuously improving our product over time. That’s why from the very beginning, with our first cell in 2010, we took the current captive model used in the business liability world, modified its structure and improved its performance. This approach continues more than a decade later and why we will never compromise our captive structure ... We don’t commoditize, we optimize."
By choosing captive health insurance, businesses have a choice in prescription drug venders, which reduces cost and pays out rebates, lower premium tax and admin costs, pay only for what employees will use and offer wellness programs as a preventive measure for later serious illness claims. These benefits reduced volatility and risk and Everlong's high performance model with 100% transparency make switching to captive health insurance ideal for employers facing ever-increasing medical insurance costs and market uncertainty.