Businesses Band Together through Group Captive Insurance Programs to Achieve Cost Containment in Healthcare

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To combat escalating employee benefit costs, employers across the United States are turning to programs like the new CypressCap from Cypress Benefit Administrators and other group captive insurance structures. They are realizing significant savings potential and containing healthcare costs by pooling their collective risk through this growing form of self-funded insurance.

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These programs are an innovative, effective alternative to addressing the out-of-control healthcare costs so many business owners are facing today.

In a time when employers are trying to keep pace with the mounting expense of employee benefit plans and contain their overall healthcare costs, many are opting for alternatives to traditional insurance plans and realizing significant savings in the process.

An option that has become more prevalent in recent years is self-funded insurance through the formation of group captive insurance programs. Similar to the newly-introduced CypressCap program from Cypress Benefit Administrators of the United States, these structures provide a way for multiple businesses to team up, pool their collective risk and form their own insurance company – one that is administered by a captive management company domiciled in the U.S. or other global location.

The first group captive dates back to the 1500s with the shared risk of shipping fleets, but these insurance structures have extended to all types of industries today, such as medical malpractice and workers’ compensation, and more recently, employee benefit plans.

By joining together, group captive insurance gives members more control over their insurance plans and the ability to benefit from savings not typically achieved through traditional plans. In the case of the new CypressCap program, certain requirements like the need to have a minimum of 50 employees are in place to help ensure maximum plan effectiveness. Additionally, instead of basing premiums on average cost – often referred to as community rating – CypressCap and other group captive insurance programs configure rates by member demographics, experience and risk profile.

Employers can also realize several unique savings opportunities through group captive partnerships. As Tom Doney, CEO of Cypress Benefit Administrators, explained, “With group captives, employers have a cost savings potential that just isn’t achievable through conventional carriers. These programs are an innovative, effective alternative to addressing the out-of-control healthcare costs so many business owners are facing today.”

Some examples of how CypressCap and other group captives allow members to save include underwriting profit, investment income and tax advantages. These self-funded insurance structures can also result in better cash flow management in that claims are paid by employers once they are incurred and processed instead of collected up front.

Since starting business in 2000, Cypress has experienced significant growth nationally and currently serves members in 49 states and two Canadian Provinces. It has pioneered the way toward cost containment in health care as the country’s first TPA to bring claims administration, consumer driven health plans and proven cost control measures together into one package. Over the last five years, Cypress clients have averaged increases in employee benefit rates of just three percent – much less than the national average – and per-employee costs have come in at more than 30 percent below published national averages. For more information, visit

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Lori Van Handel
Willems Marketing
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Tom Doney
Cypress Benefit Administrators
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