If you’re an employer with 50 to 250 employees, chances are your health insurance renewal has become something you dread. Year after year, costs go up—but transparency and control don’t. It’s a frustrating cycle we call the fully insured treadmill, and it’s why more forward-thinking companies are stepping off.
At PF Compass, we help businesses rethink how they finance and manage employee health benefits. One of the most effective tools we offer is a self-funded captive model—a proven strategy to take back control, manage risk more efficiently, and even recoup money you’re currently handing over to insurance carriers.
Let’s walk through the key challenges—and the smarter solutions available.
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The Problem: Escalating Costs, No Control
Healthcare costs continue to rise faster than inflation, with annual premium increases outpacing wage growth and business revenue in many industries. But what’s driving these increases?
As an employer, ask yourself:
- Do I know what’s actually driving my annual premium hikes?
- Am I rewarded when our company has a good claims year?
- What long-term strategies do I have in place to contain healthcare costs?
In most fully insured plans, the answer is the same across the board: No control, no reward, and no transparency.
When you’re fully insured:
- You pay high, fixed monthly premiums—regardless of your employees’ actual healthcare usage.
- Your benefits are bundled and standardized, with little room to customize.
- Your insurer pockets any savings from low claims years (and your pharmacy rebates, too).
It’s a one-sided deal.
The Solution: A Smarter Model for Smarter Employers
A self-funded captive health plan flips this old model on its head. With PF Compass guiding the process, you can:
- Pay only for what your employees actually use. You fund a claims account and use those dollars only when care is accessed. If claims are lower than projected, the unused funds stay with you—not the carrier.
- Share risk with like-minded employers. By joining a captive—a pooled group of employers—you gain the scale and protection of a larger group without sacrificing control. You’re not going it alone.
- Unbundle and customize your benefits. Design medical and pharmacy plans that reflect your team’s real needs. Choose networks, plan features, and vendors that work for you.
- Reclaim pharmacy savings. Transparent Pharmacy Benefit Managers (PBMs) send 100% of rebates and manufacturer savings directly back to you, not hidden in your carrier’s profit margins.
- Receive annual distributions. If your share of the captive’s pooled funds goes unused, you receive a check back at the end of the year—just like a dividend.
- Gain visibility and data. Self-funding provides access to claims data so you can identify trends, intervene early, and manage chronic conditions more effectively—something traditional plans typically don’t offer.
What Does This Look Like in Practice?
Let’s say your company currently spends $1.2M a year in premiums. Under a fully insured plan, that money’s gone the moment you pay it—no matter how healthy your workforce is.
With a self-funded captive approach:
- You might reserve $400K in claims funding (which you keep if unspent),
- Pay fixed stop-loss premiums for catastrophic protection,
- And receive year-end savings from both unspent claims and captive pool performance.
The result? High-quality care for your employees. Better financial outcomes for your business.
What Does This Look Like in Practice?
This model is ideal for employers with:
- 50 to 250 benefits-eligible employees
- Stable or predictable claims patterns
- A desire for long-term cost control, not just short-term savings
- Frustration with current insurance limitations
Next Steps: A No-Pressure, No-Cost Assessment
At PF Compass, we work with businesses across industries who are ready to explore smarter health plan options. If you’re interested, the first step is easy— a collaborative, no-obligation plan assessment. We’ll analyze your current spend, claims profile, and goals, and offer a tailored proposal with savings potential and risk management strategies.
You don’t need to stay stuck on the treadmill. Let’s walk you through the off-ramp.
Brian Honan | Partner
PF Compass Employer Guidance & Benefit Solutions
440 Route 22, E., Suite 190
Bridgewater, NJ 08807
Tel (973) 732-0697
