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Foundation Health Insurance Ltd. |
Traditional Insurance Companies |
| Costs and Expenses |
Greater transparency into the flow of dollars and high-cost claim drivers. Premium calculated based on group’s own claim experience and performance. |
Lack of transparency into how traditional insurance companies calculate premiums. Operating costs are generally not disclosed, and premiums are based on industry data. |
| Cost Stabilization |
Captive owners fund their own predictable losses while reinsuring catastrophic claims, and premiums can be stabilized through health risk management strategies. |
Premiums increase based on insurance cycles, not individual’s loss experience. |
| Risk Profiles |
Foundation Health Insurance, Ltd. Requires a census with all employees and dependents enrolled in the healthcare plan, and 2-3 years of detailed claim history. If claims data is not available, underwriting may require 2 years of renewal history. |
Insurance company selects only those classes of risk that conform to its "standards" without providing insight to other groups within the pool as to what those standards are or how individual group information is reviewed. |
| Choosing Services |
Captive owners help determine which services will be available as options, promoting cost effectiveness for the captive. Each member can choose their third-party administrator, network, and plan design. |
The standard market avoids providing individual services on a fee basis. |
| Choosing Coverages |
Coverages can be tailored to the specific needs of the captive owners. |
Fewer coverage variety and options. |
| Claims |
Insight into high-cost claim drivers through reporting provided by the TPA. Ability to implement health risk management strategies based upon those claim drivers and to help reduce spend. |
Very little claims transparency. No way to identify high-cost claim drivers and implement cost containment solutions. |
| Networking |
Opportunities for organic networking with like-minded businesses. Ability to share strategies and ideas related to healthcare cost containment. |
Traditional insurance programs do not provide networking opportunities or initiatives to help groups determine the best long-term approach for controlling healthcare costs. |
| Investments |
Captive invests loss funds and any investment income is maintained for the benefit of captive owners. |
Insurance company retains all investment income. |
