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Why Fund Employee Benefits Through a Captive Insurance Program?

Why is it a good idea to fund employee benefits through a captive insurance program? The simple answer is that it’ll get you the data you need to save money for your company.

As this Business Insurance article explains, captive structures can temper rising medical costs by giving employers access to employee medical data they can use to reduce claims and billing.

“If you do absolutely nothing in the next five years, you can see (medical costs for DHL) increasing basically e60million ($81.9 million) per year,” Bill Fitzpatrick, VP at Germany-based Deutsche Post A.G. (DHL) explained to BI.

By using a captive program for employee benefits, DHL saves 20-21% each year.

A captive allows employers to:

  • Increase efficiency of funding for benefit plans
  • Have greater control of medical data
  • Reduce cost
  • Provide security to plan members
  • Consolidate pension plan assets
  • Bring in 3rd party business for more efficient tax treatments
  • Scale benefit plans

It’s an effective way to bridge the gap between HR and finance, and is something worth looking into for any company that offers its employees benefits.