Self-insurance plus stop loss
Self-insurance is not the entire treatment. Organizations save money, but they have a higher administrative burden and risk exposure to catastrophic claims. To offset these disadvantages, employers typically engage third-party managers to envision administrative tasks and work together to purchase stop loss insurance.
This is Carecentrix's strategy and I'm purchasing Stop Loss Insurance from Cigna. Cigna also manages the company's self-insured healthcare plan.
“It's going to be difficult for one of our size to manage a healthcare program,” said Phillip Shiver, CFO of 1,700 employee providers for home care services. “We need a provider with a national network to handle billing processing, employee privacy issues, healthcare inquiries and other administrative tasks.”
Carecentrix exerted employee health care plans on self-insurance even before Shiver joined the company in 2013. Self-insurance planning and stop loss insurance coverage combined for years to keep Healthcare Premium flat.
In 2024, Premium has “small bumps,” reflecting an increase in healthcare costs, Shiver says. To mitigate the impact, the company increased the points on which Cigna's stop loss insurance policy was launched from $250,000 from the previous $250,000. Despite this, he says, self-insurance plans remain “while significantly cheaper than buying a fully insured plan.”
Like many employers who self-insured healthcare, Carecentrix is investing in long-term strategies that focus on reducing employee healthcare costs, including wellness programs, preventive care and targeted interventions. “We will provide cancer screening tests to capture potentially devastating conditions faster and put together cooking seminars that will encourage healthy eating, walking and other exercise events. We are taking part in a variety of competitive races that our group of employees call the “zombie challenges,” the CFO says.
Naturally, given Carecenterix's mission to “make it a home at the heart of patient care,” its medical plan is structured to quickly redirect care to the employee's home whenever it is medically viable. “It's much cheaper than the hospital environment and is also better for the health and well-being of our employees,” Shiver says.
Self-insurance and prisoners
Prisoners of the group that M. Davis & Sons joined was the 26th Employers tally hundreds of like-minded organizations in various industries and sectors. “All partners aim to be cost-effective plans that will benefit employees the greatest benefits,” says Gilmartin.
Gilmartin attributes an average 4% increase in Healthcare Premium over the past decades to workshops, webinars and other gatherings where Captive members discuss their respective claims' experience and cost containment tactics. “We share successes and failures,” he says.
Examples include employee emergency room visits and key drivers for health care plan costs. According to receNT Research, Visits to U.S. emergency rooms can cost over $4,000 depending on the severity of your condition. In a meeting with fellow prisoner members, Gilmartin learned that so many ER visits were relatively benign conditions, such as ear pain.
To discourage such a visit in the future, prisoner of war health insurance has increased the price to go to the ER for such conditions.
Founded in 2011, the health status encourages member companies to rethink their health insurance by managing it. This empowerment is evident in M. Davis & Sons' decision to open the scope of expensive organ transplants from prison medical outage policies. For example, heart transplants usually cost over $1 million, but Yale Medicine shows that only 3,700 per year are performed in the United States.
By removing the port area, M. Davis & Sons received a premium discount of $6,000 per month with its Stop Loss policy. The surgery is fully insured under separate insurance and priced at about $3,000 a month.
“We have two kidney transplant cases with zero costs for business or zero costs for individuals other than annual premiums in carve outage coverage. Carve out Value as a targeted cost-reducing solutionGilmartin says.
Choosing small and medium-sized businesses
Smaller employers, such as CARTA Healthcare, a provider of AI-fuel clinical data management solutions for 50 employees, are also leveraging economies of scale provided by networking with like-minded employers. They do so through a professional employer organization (PEO). “We pool healthcare coverage and expenses with hundreds of other small businesses at PEO, Insperity, and save on average 30% on our insurance costs,” says Carta Healthcare CFO Lucas Tanner.
PEOs act as records employers for multiple companies employing 25-250 employees, making a great influence in negotiating more favorable health insurance premiums. “We analyzed whether comparable benefits would cost us from fully funded health insurance plans and found that savings from our PEO, Insperity, were consistent with the other small businesses I have served as CFO,” Tanner said.
Deloitte's Koccia says small businesses like Carta Healthcare may be on the path to a prisoner of war and self-insurance model. Given CARTA's May 2025 infusion of Series B1 funds of $18.5 million, this kind of growth lies on the card.
“Like all forms of insurance, the more people you have, the more opportunities you have to spread risk and seize economic value,” says Koccia. “That's a number of rules.”
