A step-by-step guide for agents navigating health benefits captives, from first conversation to implementation and ongoing plan management. 

Why this exists

If you've spent your career placing fully insured health plans, this process is going to feel different. Not harder, just different. There are more steps, more data involved, and more conversations before anything gets quoted. That's not a bug. That's actually the point.

The reason most employers stay stuck in fully insured plans year after year isn't that those plans are the best option. It's because nobody ever walked them through an alternative in a way that made sense. This guide is meant to change that, starting with you.

You don't need to be a captive expert to use this process. You need to understand what's happening at each stage, what your job is, and what comes next. That's what this document gives you.

Stage 1: Initial Fit Conversation

What's happening

This is a real conversation, not a form, not a calculator. The goal is simple: determine whether this group is worth exploring before anyone spends time gathering data or setting expectations. Some groups are an obvious fit. Some aren't. Many fall somewhere in between, and that's fine because that's what the next stages are for.

What you need to do

Come ready to talk about the basics: how big the group is, what they're currently paying, whether they're fully insured or something else, and whether the employer has ever pushed back on rising premiums or asked where the money goes. You don't need claims data yet. You don't need a census. You just need enough to have an honest conversation about whether it's worth going further.

What to expect next

One of three outcomes: we move forward to pre-qualification, we pump the brakes until you have more information, or we agree it's not the right fit right now. Either way, you'll know where you stand.

Stage 2: Pre-Qualification

What's happening

Now we get a little more specific. We're looking at the basics of the group and trying to answer one question: does this opportunity have real potential, or are there issues that would make it a poor fit before we go any further? This is also where we start clearing up assumptions that agents often carry in from the fully insured world.

What you need to do

Be ready to share what you know about group size, current premium levels, and anything you've heard about claims, even if it's informal. If you know there are a couple of employees with expensive conditions or high-cost drugs, say so. That information doesn't disqualify the group. It actually helps us figure out whether there are plan design solutions that could change the picture.

A few things worth knowing before this conversation:

• Age alone doesn't tell the story. A group with an older average age may still be a great fit if their claims are well-managed.
• A high loss ratio doesn't automatically mean no. Sometimes one or two expensive drugs are distorting the whole picture, and those can often be handled outside the plan entirely at no cost to the employer.
• Community-rated groups may be getting significantly overcharged relative to their actual claims. That's worth exploring, not avoiding.

What to expect next

A clear signal on whether to move to a data request, a note that we need a bit more information first, or an honest conversation about why it's not the right fit based on what we know so far.

Stage 3: Data Request

What's happening

This is where we get formal about what we need to do a real evaluation. We'll give you a checklist, and we'll explain what each item is and why it matters, not just hand you a list and wish you luck. The reality is that getting benefits data can be frustrating, especially for smaller groups. Carriers sometimes make it harder than it needs to be, and in some states, there are limits on what's available. We'll walk you through that so you know what to do when you hit a wall.

What you need to do

Request the following from the employer or their current carrier:

• Three years of premium history
• Current plan details and funding arrangement
• Claims data, if available
• Large claimant information, if available
• Prescription drug cost information, if available

If the carrier pushes back on claims data, don't accept that as a final answer. HIPAA is often used as a reason to withhold data, but employers who are self-funded or who challenge their carrier directly often find that the data is available. Carriers just don't volunteer it. The rules vary by state and by group size, so if you're running into resistance, bring it to us before you walk away from the request.

If some data is missing, that doesn't kill the opportunity. Come back with what you have, and we'll tell you how to proceed.

What to expect next

Once we have the data, complete or partial, we move into the review. You'll hear back from us with a clear picture of what we found and what it means.

Stage 4: Data Review and Opportunity Assessment

What's happening

This is where the real work happens on our end. We're not just running numbers. We're trying to understand what's actually driving costs and whether there's a real path to savings. A group that looks expensive on the surface may have one or two fixable problems. A group that looks clean may have structural issues that would follow them into any new arrangement. We're trying to tell the difference.

What you need to do

Not much at this stage. You've done the heavy lifting, getting the data. Be available to answer follow-up questions if something in the data doesn't add up or if we need context about the employer's situation.

What to expect next

We'll come back to you with a clear assessment: what's driving the costs, whether we think there's a meaningful opportunity here, and what the strategy conversation should focus on. If it's not a fit, we'll tell you why in plain terms so you can explain it to the client.

Stage 5: Strategy Recommendation

What's happening

Based on everything we've reviewed, we'll tell you what we think the right path is for this group and why. That might mean a full captive arrangement, a self-funded structure without captive participation, or a recommendation to stay where they are for now. It will always include a conversation about cost containment, because that's where the real savings come from.

Here's something important to understand and explain to your clients: moving to a captive structure matters only if the employer is willing to actively manage its claims. The structure itself doesn't save money. Controlling where the healthcare dollar goes is what saves money. If an employer isn't open to that work, this probably isn't the right fit, and it's better to say so upfront than to set them up for disappointment.

What you need to do

Make sure the employer understands that this is a strategy, not just a product switch. The conversation should cover how money flows under their current plan, what changes would occur under a self-funded or captive structure, and what the employer's role looks like going forward. We'll help you frame that conversation.

What to expect next

A clear recommendation with a clear rationale. If it's a go, we move to the proposal.

Stage 6: Proposal Review

What's happening

We walk you and the employer through the actual proposal: what the structure looks like, how the money moves, what the employer's maximum exposure is, and how unused claims dollars and potential captive returns work. This stage exists because the proposal can get confusing fast if nobody explains it, and confused employers don't move forward.

What you need to do

Don't try to explain the proposal before we've walked through it together. There are a lot of moving parts, and the terminology alone can lose people if it's not introduced carefully. Your job here is to make sure your client feels confident and informed, not overwhelmed. Let us help you do that.

A simple way to orient your clients before the formal review:

In a fully insured plan, your healthcare dollar goes to the carrier. If claims come in under what you paid, the carrier keeps the difference, and you see none of it.

In a self-funded or captive structure, unused claims dollars stay with the employer. In a captive, there's an additional layer: if the captive performs well as a whole, members may also receive a return on the premium they contributed to the shared pool.

That's the core of what the proposal will show. Everything else is the mechanics of how it works.

What to expect next

An employer who understands what they're agreeing to and is ready to move into implementation with open eyes.

Stage 7: Implementation

What's happening

This is where everything gets set up operationally. The TPA is brought in, the claims funding approach is finalized, plan design is locked, and both the employer and employees are prepared for the transition. In the benefits world, this stage involves more people than you might be used to on the P&C side. Employees need to understand their plan, not just the employer.

What you need to do

Stay engaged. The agent's role doesn't end when the employer signs. You're still the relationship holder, and employee communication is part of a successful rollout. We'll tell you what we need from you at each point so nothing falls through the cracks.

What to expect next

A live plan with a clear structure, an employer who knows how it works, and employees who know what they have.

Stage 8: Ongoing Management

What's happening

This is not a set-it-and-forget-it arrangement. Claims are monitored, plan performance is reviewed, and strategy is adjusted as the picture changes. This is also where employers who did the cost-containment work start to see the difference, and where those who didn't start to understand why it mattered.

What you need to do

Stay in the loop on performance reviews. The employers who get the most out of this arrangement are those whose agents are engaged and help them stay disciplined over time. That's also how you build the kind of client relationship where they never shop around.

What to expect next

Over time: better claims data, better plan performance, and an employer who sees you as the person who actually changed how they think about healthcare costs, not just the person who sold them a policy.

Initial Fit Conversation Guide

What this is for

This is not a formal intake form. It's a reference you can use before or during a first conversation to make sure you're covering the right ground. Whether you're talking to an employer directly or to a fellow broker who's brought you a case, the goal is the same: figure out whether this group is worth exploring before anyone spends time on data requests or proposals.

You don't need to ask every question on this list. Read the room. Some conversations will answer half of these before you even ask.

If you're talking to a broker who brought you the case

Start here. These questions help you understand what the broker knows and how much education they'll need alongside the employer.

• How familiar are you with self-funded or captive arrangements? Have you placed one before?
• What made you think this group might be a fit?
• Have you had any conversation with the employer about their frustration with costs or premiums yet, or is this early?
• Does the employer know you're exploring alternatives, or are you still in the research phase?

If you're talking directly to the employer

These questions open the conversation without overwhelming anyone in the first five minutes.

• How long have you been with your current carrier or plan?
• When you renew each year, do you have a clear picture of where your premium dollars are actually going, or does it feel like you're just accepting a number?
• Have your rates gone up over the last few years? How has that been handled internally?
• Have you ever asked your carrier or broker for a breakdown of your claims versus what you paid in premium?
• Do you know whether you're currently fully insured, level funded, or self-funded?

Questions that apply in either conversation

These get to the heart of whether the group has real potential.

• How many people are covered on the plan, including dependents if known?
• What are they currently paying per month, roughly, either as a total or per employee?
• Is there anything you already know about the health of the group, any high-cost conditions, ongoing treatments, or expensive medications?
• Has the employer made any changes to the plan design in the last few years to try to control costs, or has it stayed pretty much the same?
• Is the employer the kind of person who wants to understand how this works, or are they more focused on the bottom line outcome?
• Is the employer open to making changes to how the plan is structured if it means better control over costs long term?

How to read the conversation

Green flags:

• Employer is frustrated with rising costs and asking questions
• Claims data exists or can be requested
• Employer is open to being an active participant in managing the plan
• Group has 25 or more covered lives

Yellow flags:

• Employer has never seen claims data and isn't sure they want to
• Group is under 25 lives
• Employer seems focused only on the lowest possible premium with no interest in how it's built

Red flags:

• Employer has zero interest in making plan design changes
• Group has had significant recent large claims with no sign of resolution
• Employer is looking for a quick fix rather than a long-term strategy

How to close the conversation

If it feels promising, say something like: "Based on what you've told me, I think it's worth taking a closer look. The next step is pulling together some basic information on the group so we can do a real evaluation. I'll send you a short list of what we need and we can go from there."

If it's unclear, say: "I want to make sure we give this a fair look before we go too far down the road. Let me come back to you with a few follow-up questions once I've had a chance to think through what you've shared."

If it's not a fit, say: "Based on where things stand right now, I don't think the timing is right for this. That could change, and if it does I'd want to revisit it. But I'd rather be straight with you than waste your time on something that isn't going to work."

Pre-Qualification Question Guide

What this is for

You've had the initial conversation and the group seems worth a closer look. This guide helps you go deeper before anyone asks for formal data. The goal here is to surface the information that tells us whether this is a strong candidate, a possible candidate, or something we should set aside for now.

If you're comfortable running this conversation on your own, go ahead. If you'd rather have Warren or Thomas on the call with you, that's fine too. Either way, these are the questions that need to get answered.

About the current plan

These questions help establish what the employer is actually working with today.

• How long have they been with their current carrier?
• Are they fully insured, level funded, or self-funded? If they're not sure, that's useful information on its own.
• What are they paying in total monthly premium right now?
• When did they last see a meaningful change to their plan design, or has it stayed largely the same for several years?
• Has the employer ever questioned what happens to their premium dollars if claims come in under what they paid?

About the group itself

• How many total lives are covered, including dependents if known?
• What is the general makeup of the workforce? Industry, average age range, full-time versus part-time split if relevant.
• Is the group growing, stable, or shrinking?
• Are there any known high-cost health conditions among employees or dependents?
• Are there any employees or dependents on expensive ongoing medications?

About claims and cost drivers

This is where the conversation gets specific. Don't worry if the employer doesn't have answers to all of these. What they don't know is just as useful as what they do.

• Has the employer ever seen an actual breakdown of their claims versus premium?
• Do they know whether their costs are being driven by a lot of smaller claims or a handful of large ones?
• Have they ever looked at what their top prescription drug costs are?
• Has their broker ever discussed plan design changes as a way to manage costs, or has the conversation always been about finding a lower premium at renewal?

About the employer's mindset

These questions matter as much as the numbers. An employer who won't engage with cost containment is not a good fit regardless of how the claims look.

• How does the employer typically approach the renewal conversation? Do they push back, or do they accept it and move on?
• If there were changes to the plan that could reduce costs over time but required some involvement from the employer, is that something they'd be open to?
• Has the employer ever felt like they had real transparency into how their health plan was actually performing?
• What would a good outcome look like to them? Lower costs, more control, both?

How to read the answers

Strong candidate indicators:

• Employer has never had real claims transparency and is frustrated by that
• Group has 25 or more lives with stable or growing headcount
• Cost drivers appear to be concentrated, meaning a few large claims or a handful of expensive drugs rather than widespread issues
• Employer is open to plan design changes and willing to be an active participant

Proceed with caution indicators:

• Employer wants lower costs but isn't interested in understanding how the plan works
• Claims data is completely unavailable and the employer has never pushed to get it
• Group is under 25 lives
• Recent large claims with no clear resolution or end in sight

Likely not a fit right now:

• Employer expects a plug-and-play solution with no ongoing involvement
• Group has had catastrophic claims with no stop-loss currently in place
• Employer is purely price-driven with no interest in the structure behind the number

How to wrap up the conversation

If it looks strong, say something like: "This looks like it's worth a formal review. The next step is pulling together some specific information on the group. I'll send over a short checklist of what we need and we can take it from there."

If it's unclear, say: "There are a few things I want to think through before we go further. Let me follow up with you in the next day or two with a specific question or two and we'll figure out the right next step."

If it's not a fit, say: "Based on what we've talked through, I don't think the timing is right for this group. That doesn't mean never, but I'd rather tell you that now than put everyone through a process that isn't going to get where we want to go."

Data Request Checklist

For agents: This checklist serves two purposes. You can send it directly to an employer or use it as your own reference before submitting a case for review. The notes under each item are for you. The checklist itself is clean enough to forward as-is.

For employers: Your agent has asked us to take a look at your current health plan to see whether there's a better structure available to you. To do that, we need a few pieces of information. Most of this can be pulled from your current carrier or broker. If anything on this list is hard to get, let your agent know and we'll help figure out the right path forward.

What we need

Three years of premium history

• What it is: a record of what you have paid in total monthly and annual premium for each of the last three plan years
• Why it matters: it gives us a baseline to compare against and helps identify trends in how costs have moved
• If you can't get it: ask your current broker, they should have this on file

Current plan documents and summary of benefits

• What it is: the plan design details showing what is covered, what the deductibles are, and how benefits are structured
• Why it matters: plan design has a direct impact on claims costs, and we need to see the current structure before recommending changes
• If you can't get it: your carrier is required to provide a Summary of Benefits and Coverage upon request

Claims data for the last three years if available

• What it is: a breakdown of claims paid out against your plan, ideally showing total paid claims by year
• Why it matters: this tells us whether costs are being driven by frequency or severity and whether there are fixable issues in the current picture
• If you can't get it: under 100 covered lives, access to claims data varies by state. Some carriers will provide it if you ask directly. If they push back, let your agent know before giving up.

Large claimant report if available

• What it is: a report showing any individual claims that exceeded a certain threshold, typically provided without identifying the specific member
• Why it matters: a small number of large claims can distort the whole picture. Knowing whether that's the case changes how we evaluate the opportunity.
• If you can't get it: this is often available for groups over 100 lives. For smaller groups it depends on the carrier and the state.

Prescription drug cost summary if available

• What it is: a breakdown of what the plan has paid in prescription drug costs, ideally showing the top drugs or drug categories by spend
• Why it matters: Rx costs are one of the most controllable drivers of overall plan cost. In some cases, one or two expensive medications are responsible for a significant portion of total spend, and there are plan design solutions that can address that directly.
• If you can't get it: ask your broker whether this was included in your last renewal report. It often is but gets buried.

Current funding arrangement confirmation

• What it is: a simple confirmation of whether the group is currently fully insured, level funded, or self-funded
• Why it matters: the starting point determines what transition looks like and what data we can realistically access
• If you can't get it: if the employer isn't sure, their broker or the format of their invoice will tell the story. A single premium line with no breakdown means fully insured.

A note on missing information

Not having everything on this list does not stop the process. Come back with what you have and we will tell you what we can work with and what we still need. The only thing that slows things down is not asking.

For agents submitting a case

Once you have gathered what's available, send it over along with a brief note on anything that was unavailable and why. Include any context about the employer's situation that would help us understand what we're looking at before we dig in.

Where Does Your Healthcare Dollar Go?

Three structures. One dollar. Very different outcomes.

The question worth asking your employer:

What happens to your healthcare dollars when your employees stay healthy? In a fully insured plan, the carrier keeps them. In a self-funded or captive structure, you do. That single difference is why employers who understand how this works rarely go back.

For discussion purposes only. Not legal or tax advice.

A Plain English Guide to How Your Health Plan Actually Works

What this is

If you've had the same kind of health plan for years, you've probably never had anyone sit down and explain what actually happens to your premium dollars. This guide does that. It won't take long to read, and by the end you'll understand more about how your health plan works than most business owners ever do.

How most businesses buy health insurance today

Most employers are fully insured. That means every month you write a check to a carrier, your employees get coverage, and that's the end of the transaction. If it's a healthy year and claims come in well under what you paid, the carrier keeps the difference. You don't see any of it, you don't get a report on it, and at renewal you find out what next year is going to cost.

That's not necessarily wrong. It's simple, and simple has value. But simple also means you have no visibility, no control, and no opportunity to benefit when your employees stay healthy.

What self-funded means

When a business moves to a self-funded arrangement, the structure changes. Instead of one premium check that disappears into the carrier, your healthcare dollar gets divided into three parts:

• 75 cents goes into a claims pool held in an account that belongs to you, administered by a third party who pays claims on your behalf
• 15 cents buys stop loss coverage, which is insurance that protects you if claims get unexpectedly large
• 10 cents covers administration, the cost of running the plan

The important part is that claims pool. It belongs to you. If your employees have a healthy year and claims come in under budget, the money left in that account comes back to you. The carrier isn't keeping it.

What a group captive adds

A group captive takes the self-funded model one step further. Everything works the same way, with one difference: instead of buying stop loss coverage on the open market, you join a group of other employers who pool that layer of risk together.

That pool is the captive. Each member contributes to it. If the group as a whole has a good year, members receive a portion of the unused funds back based on their own plan's performance. You're still self-funded, still controlling your claims pool, but now you also have a share of the upside from how the broader group performs.

The question that changes the conversation

Most employers have never asked this: what happens to my money when my employees stay healthy?

In a fully insured plan, the carrier keeps it. In a self-funded or captive structure, you keep it. That's the conversation worth having.

What this requires from you

Moving to a self-funded or captive structure isn't just a product switch. It requires the employer to be an active participant in managing how the plan is designed and how claims are controlled. The structure creates the opportunity. How you manage the plan determines whether you actually benefit from it.

If that sounds like more work than you want to take on, that's a fair answer. But if you've been watching your premiums go up every year without knowing where the money goes or what you're getting for it, it's worth understanding what the alternative actually looks like.

What comes next

Your agent can walk you through a review of your current plan and show you specifically what the numbers look like for your group. There's no obligation in having that conversation, and it won't cost you anything to find out whether there's a better structure available to you.

For discussion purposes only. Not legal or tax advic