Cypress Benefit Administrators, a national third party administrator (TPA) based in Appleton, Wisc., and with locations in Portland, Ore., Omaha, Neb. and Pueblo, Colo., has launched CypressCap group captive insurance option for employers with 50 or more employees.
With healthcare costs continuing to rise, captive insurance has become more prevalent for small to mid-size employers as a means to offset the financial sting of rising healthcare costs, according to Tom Doney, president and co-founder of Cypress.
“As healthcare rates continue to escalate significantly from year to year and with no way to predict if or when they will stabilize, employers are really feeling the pressure,” Doney says. “With this in mind, we designed CypressCap as an option for employers that are being much more proactive about implementing effective cost containment measures.”
CypressCap allows participating employers to experience cost savings over the long term by benefitting from underwriting profits and tax advantages. Employers using the program can also be subject to fewer administrative fees and have increased cash flow.
As an added benefit, CypressCap also gives employers the opportunity to retain investment income that would typically be paid up front to traditional insurance carriers in the form of claims and premiums.
“The distinction between group captives and traditional carriers is in the way premiums are determined,” Doney says. “Instead of paying a community rating based on average cost as a whole, employers’ premiums are instead calculated according to demographics, risk and profile.”
Once used to cover predictable risk in areas such as general liability and workers’ compensation, group captives are now being formed for different coverage areas as evidenced by employee benefits.
Cypress partners with A+ rated carriers as well as captive management companies, networks, pharmacy benefit managers and other organizations committed to cost containment.
Cypress Benefit Administrators, a privately held company, offers employee benefit packages combined with health insurance options for employers of 50 to 18,000 throughout the United States.