Southern Insurance Underwriters, Inc. announced the launching of a new specialty product designed to assist mid-sized businesses control the cost of employee benefit health insurance plans. The product is a group medical stop-loss captive insurance program designed for businesses with 100 to 500 covered individuals, especially those employers currently utilizing self-insured plans.

Under a self-insured medical plan an employer contracts with a claims TPA that has access to a cost-efficient provider network, and with an insurer for “stop-loss” coverage. The stop loss policy covers individual claims exceeding a specific amount (such as $50,000) and annual aggregate claims over a specified amount. The employer generally funds its retention on a pay-as-you-go basis.

A group medical stop-loss captive enhances the self-insured arrangement described above into a much more efficient structure. The “group” consists of a number of mid-sized self-insured employers joining together to share a layer of risk between the individual employer’s claim retention and a much higher attachment point for the stop-loss coverage purchased from the stop-loss insurer. Each member of the group contracts with the captive for the sharing process. Key advantages of this structure are:

1. Lower premium for stop-loss coverage.
2. A “smoothing” of results over time, due to the “law of large numbers” effect provided by the group captive.
3. Increased incentive to prioritize employee wellness programs.

The captive will utilize SIU’s affiliated Green Mountain Sponsored Captive Insurance Company, a facility currently hosting a number of individual and group stop-loss captives. A major “A” rated insurer provides the stop loss coverage.

For more information about SIU’s group medical stop-loss captive program, contact Hugh Nelson, Senior Vice President at 678-498-4801, or hnelson@siuins.com.