How Captives Work

Captives BlueStone Advisors, Lombard

Captives offer a different approach to healthcare benefits. Employers looking for control, transparency and cost savings often find the perfect fit with a medical captive.

Captives insurance is simply another form of self-insurance that has found significant appeal as an alternative funding strategy to traditional health insurance. In traditional insurance you pay a fixed premium and the insurance company assumes the risk of medical claims from the employee benefit plan.

That means if your plan performs better than expected, your carrier pockets the profits, but if it performs worse, you see sky-rocketing double-digit increases. In self-insurance, employers assume a portion of the claim cost by paying for a share of each claim as they are incurred. In exchange, the employer improves its cash flow, claim information received and control over the plan. It’s a misconception that only large corporations are candidates for self-insurance.

BlueStone Advisors will show you how captives make self-insurance work for even small and mid-size employers.


Fundamentals of Captives

Understanding Captives

For years, large companies have used self-insurance strategies to reduce insurance costs, lower their risk, and optimize tax savings. Thanks to BlueStone Advisors’ captive management services and access to best in class group captive programs, these benefits are now available to agencies, middle market companies, and groups & associations.

An organization can realize many benefits by using a captive but each one comes down to a greater degree of control. When you establish your group in a captive, YOU control costs, YOU control cash flow, YOU control claims, and YOU control risk.

With a captive you have the freedom to:

  • Pool risk with other employers in your captive
  • Pay amounts you determine by writing the policies and setting premium
  • Deduct premium payments from your taxes
  • Collect payments and invest them for future claim payouts
  • Influence insurance coverage including claims handling procedures
  • Profit from improved claim performance, unused funds are paid to the owner of the captive – YOU!

Choosing Captives

There’s no one-size-fits-all solution for captives. There are many types of programs, each structured differently. That’s why it’s important to find a partner, like BlueStone Advisors, who can guide you through all your options to find the right fit. BlueStone Advisors will help you understand if captive insurance is a good match. If it is not, we will be the first to let you know AND then engage our best in class client advocacy team to work with you and the traditional direct markets to mitigate costs and provide the optimum strategic outcome. If a captive is the right fit, our professionals will help educate you on which structure and program works best for your specific industry and group size.

Captives FAQs



Pricing & Expenses


How We Help

Change Your Approach

Managing healthcare expenses is no longer a once a year conversation for employers. Healthcare and employee benefits have become a top three line-item expense (most often number 2 behind payroll) having significant impact on recruiting and retaining top talent, as well as the company’s long-term profitability.

BlueStone Advisors offers a proven solution for employers to gain control of health benefit costs by providing a funding strategy, until recently only available to large fortune 500 firms.

If you’re like a lot of mid-size employers, your healthcare expense is likely outpacing your revenue growth. This impacts not only your bottom-line but your ability to compete long-term. BlueStone Advisors can help you manage your employee benefit costs by applying a straight-forward approach to purchasing healthcare.

Purposeful Incentive Strategy
Cost Savings
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