ParetoHealth is the country's largest health benefits captive, with over $2.3 billion in health insurance spend and covering more than 470,000 lives. They seek to offer employers with 50-500 employees a turnkey employee benefits solution allows them to take control of their healthcare spend and reduce risk.
A group medical captive allows like-minded employers to combine their spend in health insurance and as a result enjoy the savings and stability of self-funding that large 1000 + employee businesses have for many years. While the number of group medical captives are growing each year, ParetoHealth is different in that they offer multiyear stop loss policies and also don't issue lasers after your first year in the captive. These two elements are pretty unique and also very attractive for employers who are looking for a long term stability. The standard is that stop loss policies are year to year which offers a chance for stop loss carriers to drastically change rates at the renewal or not renew an employer's coverage based on how they ran over the last 12 months. This traditional method can bring a bit of vulnerability for groups self-funding; but with multiyear policies, it is much more of a "collaborate partnership" because both the stop loss carrier and the employer have "skin in the game" to make sure the partnership runs as best as possible. The second part of this is that fact of no lasers are issued after a group joins the captive. It is a common practice in self-funding for stop loss carriers or captive managers to issue lasers on high cost members as a way of managing the risk. Lasers, if done correctly are a win, win for all parties involved, but if done incorrect it makes self-funding unattractive for employers who then look back to the traditional insurance market for a more predictable form of cover. With Pareto, they conduct an extensive review of your group before entering the captive and at that point might issue a laser, but once your group is in the captive, in subsequent years they will never issue your group a laser.
There are several additional aspects of Pareto's model that make it attractive for employers. First, since the group medical captive is a type of self-funding, employers have full control over their plan design and can design it the way that suits them best. Instead of picking from a menu of 3-5 plans, they can design it how they need it. Second, Pareto partners with best-in-class TPAs (third party administrators) who ensure everything for the running of the health insurance plan is carried out seamlessly. Third, employers have a choice of which networks they use, with both national and local networks giving your employees access to the quality healthcare that suits them best.
Many employers are accustom to looking at their health insurance annually using the "spread sheet model". Comparing multiple plans side by side to see which one will give you the best "bang for your buck". Employers are typically reactive when it comes to their health insurance, looking at it once a year and then dreading the next renewal as the rates continue to rise. Pareto takes a completely different approach, instead of looking at your health insurance from a policy to policy or year to year approach, they look at it over a 3-5 year span (as your business will be around for at least that long). With this approach the employer's mindset completely changes and now they are making tweaks to their plan and continue to optimize it providing a sustainable and stable health insurance plan both of the employees and for the employer. It is common for businesses to only see a 3-5% increase year on year instead of 5-15% increase which is common in the fully insured marketplace.