Healthcare cost savings through group captives


New HFA Healthcare offers savings to members and a powerful recruiting tool

Home Furnishings Association member Ken Mangum remembers offering his employees at Designer Furniture Gallery affordable healthcare that didn’t skimp on benefits. That was years ago. To keep his doors open during the recession of 2008-09, Mangum was forced to eliminate that benefit.  

 “It’s still one of the hardest business decisions I’ve had to make,” says Mangum. He’s been shopping for a good healthcare solution ever since, but plans have been too expensive.  

HFA Healthcare might be just what the doctor ordered.   

 The Association is working with longtime insurance partner Arthur J. Gallagher and online benefits broker Decisely to collectively source benefits, such as medical, dental and vision coverage, to members through a health insurance group captive.  

 A group captive is not as sinister as it sounds. It is a health insurance pool formed by similar companies – in this case, HFA members – joining to reduce the cost of their medical benefits. By joining HFA Healthcare, members can take advantage of lower healthcare costs typically only afforded to larger employers, said Mark Schumacher, incoming CEO for the HFA. 

 “Now more than ever, our members need affordable healthcare, especially in these challenging times, and they want options,” said Schumacher. “We believe HFA Healthcare can meet their needs and provide costeffective coverage.”  

 Shoppers routinely save money when they buy in bulk from warehouse clubs.  “The same strategy holds true with healthcare,” says Tyler Davis, a senior account executive with Decisely. “There’s strength in numbers, and in this case, there will be savings.”   

 Potential premium refunds

Those savings come in the form of lower premiums and potential premium refunds, Davis says. Under a traditional insurance plan, all profits are retained by the insurance carrier. In a captive, employers as participants utilize the captive to share risk, allowing them to retain underwriting profits. The profits of the captive are then returned to participating members at the end of the year pro rata (premium refund). 

For example, says Davis, if an HFA member pays a premium of $500,000 to a regular insurer and has only $300,000 in claims, the insurance carrier would keep the extra $200,000. By joining HFA Healthcare and putting that same amount of money into the group captive, the member would keep the extra $200,000 and could apply the savings toward credit on next year’s premiums or receive the money back in a check as a premium refund.  

Unlike the one-size-fits-all approach of traditional carriers, group captives like HFA Healthcare allow for different networks, pharmacy and plan designs – all customized to each HFA member’s unique needs.  The additional advantage of pooling together in a group captive is the ability to see where your healthcare claim costs are going month to month and year to year. “Too often we hear of annual renewal increases for employers with little to no transparency or justification from the insurance carrier as to why their rates went up,” Davis said. In a captive, healthcare utilization data is analyzed to understand the best risk mitigation strategies to use, in order to lower healthcare costs over time. “This is a long-term strategy for employers who want to take back control of their healthcare spend and data.”

HFA Healthcare is acutely aware of the times we are living in. That’s why, in addition to the captive, HFA Healthcare also offers HFA Healthcare Telemedicine, giving members 24/7/365 access to physicians. HFA Healthcare members can meet with U.S. Board-certified doctors in all 50 states via phone, video, or mobile app for many acute medical conditions without having to sit in a busy waiting room.  

Physicians can diagnose, treat, and prescribe medication, when necessary. “Telemedicine is important right now due to the COVID-19 environment we are all living in and is a huge value add for HFA members and their employees,” says Davis. 

Good healthcare plans result in healthier workers, Davis notes. “Studies show employees are typically more productive with decreased absenteeism, which helps employers become more efficient.”  

Strong recruiting tool

Another perk: Employer-provided health coverage like HFA Healthcare is important for recruiting the best employees, but even more important for retention. A recent survey by America’s Health Insurance Plans shows that: 

  • 56 percent of U.S. adults with employer-sponsored health benefits said that liking their health coverage is a key factor in deciding to stay at their current job.
  • 46 percent said health insurance was either the deciding factor or a positive influence in choosing their current job.  

Members interested in learning more about HFA Healthcare can receive a no-obligation quote, which will also benchmark the quote against the member’s current plan and rates, as well as benchmark against traditional insurance in the market. For more information on HFA Healthcare or to receive your free quote, start the process by visiting HFA Healthcare’s website here.



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