In the fast-evolving landscape of healthcare and employee benefits, employers often find themselves navigating a labyrinth of choices and compromises. Health insurance serves as both a fundamental necessity for employee well-being and a persistent source of financial and administrative burden for employers.

Conventional models of health insurance—whether fully insured or self-funded—often leave employers feeling trapped in a never-ending cycle of cost escalation and reduced control. This sense of operational and financial impotence is precisely what the captive insurance model seeks to counteract.

Conventional Models

Let’s begin by examining the most commonly used traditional models, starting with fully insured plans, which have long been the default option for many employers.

Fully Insured Plans

For decades, the fully insured model has been the go-to solution for many companies. In this model, the employer pays a fixed premium to the insurance carrier, which assumes the risk. While straightforward, this approach often leads to higher premiums year-over-year with little to no justification offered, leaving employers powerless and frustrated.

Self-Funded Plans

As an alternative, some companies opt for self-funded plans, wherein they take on the risk and financial responsibility for employee healthcare costs. While this model offers some level of cost control, it is not without its pitfalls. Employers may find themselves exposed to large, unpredictable medical claims, which can cause significant financial strain.

In both the fully insured and self-funded models, the employer remains a policyholder, subject to the strategies and financial interests of larger entities. These models rarely align with the employers’ best interests, often resulting in a state of chronic dissatisfaction and financial instability.

Captive Health Insurance Model

The captive insurance model offers an innovative solution that upends the conventional healthcare insurance paradigm. Unlike traditional insurance where companies pay premiums to external carriers, the captive model involves a formal arrangement among like-minded companies to co-own an insurance entity. This game-changing arrangement transforms employers from passive policyholders to active stakeholders, each with a vested interest in the efficient performance and tailored management of their health plan.

Structure and Mechanics

Under a captive arrangement, companies pool their premiums into a shared fund, which is then used to pay out claims. Within ECCG’s captive program model, employers create what is essentially a “Goldilocks Zone” that provides stabilizing economies of scale with the social dynamic benefit of owner-member shared learning, problem-solving, and collaboration.This structural transformation sets the stage for numerous benefits that go well beyond cost-saving.

The Ownership Advantage


Traditional models often leave employers feeling powerless. However, in the captive model, control is returned to the employers—the true stakeholders. This control extends from policy formulation to claims management and risk mitigation strategies. Member-owners can actively participate in shaping policies that directly align with their organizational goals, as well as the health and well-being of their employees.


In many traditional models, opacity is the norm rather than the exception. Premium calculations and claims data often remain concealed, making it difficult for employers to gain insights into the cost drivers and opportunities for savings. In contrast, the captive model engenders transparency. Being an owner means having complete access to granular data, which, in turn, facilitates informed decision-making.

Financial Stability

The financial transformation engendered by the captive model is perhaps one of its most revolutionary aspects. In traditional models, insurance companies stand to gain from the profitability of the policies they sell. However, in the captive model, any such profits are channeled back to the member-owners. This change shifts the dynamics from a consumption-based model to an ownership-based one, inherently aligning it with the financial well-being of the employer members.

Enhanced Risk Management

One often overlooked benefit is the possibility for more targeted and effective risk management. Captive arrangements often come with data analytics tools that allow member-owners to identify trends and potential risk factors well before they escalate into costly claims. This proactive, data-driven approach not only mitigates near-term risk but also builds the foundation for long-term financial stability.

Employer Success Stories

To illustrate, Episode 5 of the Everlong Edge Podcast features an enlightening conversation between our Founder and CEO Doug Truax and special guest Terrie Ames, an employer who discusses her company ML Holdings’ experience. She reveals how joining the Longbow Employee Benefit Captive in 2010 led to an astounding 8-figure cost savings.

Case Study: Nursing Care Company Saves $166K Through Self-Funding in Everlong

Case Study: Automotive Company Saves $2.3 Million Through Self-Funding in Everlong

Beyond Financials: The Cultural Shift

Ownership within a captive model does not merely affect the financial bottom line; it also triggers a shift in organizational culture. The engagement and commitment that come from ownership often cascade down to create a more health-conscious work environment. 

Employers can employ specific wellness initiatives aimed at improving the health metrics of their workforce, which has a twofold benefit: reducing claims and enhancing employee productivity and satisfaction.

The Choice is Yours: An Informed Decision

The captive health insurance model provides an innovative alternative to the status quo. It elevates the employer from a role of passive consumption to one of active engagement and ownership. This is more than just an operational shift; it’s a philosophical one. Employers now have the chance to shape their destinies and those of their employees by taking control of their healthcare plans.

While the captive insurance model may not be suitable for every organization, the compelling advantages it offers cannot be ignored. 

Just as gold in the ground needs to be extracted before it has value, so too must a company’s health insurance. But, to extract that value, one must be more than a mere policyholder.

They need to be an owner.

Ownership brings not just control and transparency, but proactive risk management, and the freedom to make business decisions that directly improve their bottom line.

And therein lies the choice.

Continue leasing the “land” from the insurance giants or start mining the gold.

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