Phil Holowka, marketing manager of MedTrans Insurance, recently highlighted necessary information about captive insurance for those planning to go captive. 

Holowka was a guest speaker on the podcast "Self-Funded with Spencer," during which he helped define what insurance captives are, as well as a host of other terms necessary to become an expert on captives. Some of these terms consist of what a captive manager is, group captive vs. single parent captive, and homogenous vs. heterogenous captive. For companies thinking about taking on a captive, this information is key to getting started.

Holowka explained what a captive manager does.

"A captive manager really sort of replaces the commercial carriers operations of that insurance company," he said. "They are the person between the client and the member of the captive and are the regulators. At Everlong, captive managers are constantly analyzing your captive in search for improvements or other possible ways to yield benefits."

A domicile is where the captive calls home.

"There's probably 40 captive domiciles now in the United States," Holowka said. "Everlong is domiciled in Downers Grove, Illinois. If you are a small business owner in the Midwest, it would be wise to join a captive close to your residence for convenience purposes. Each captive is roughly the same, so the domicile location is really only important for self-conveniences [sic]. Each captive will have its own tweak, but they are all roughly the same."

Everlong Captive separates itself from the rest of the captives through transparency and organ transplant coverage and offers many side benefits for improving policies over time.

"A group captive, by definition, is one tax ID number, one captive, that has multiple employers or participants or members subscribed to the captive," Holowka said. "They also must be fronted by a commercial carrier. A single captive has one owner, and that owner is usually a business where each employer gets their own captive."

It is important to know the difference between the two options in order to choose the model that best fits the company's insurance needs.

A homogeneous captive occurs when members of the captive are all specific to a profession or goal. So, bricklayers can only be in the captive with other bricklayers, whereas heterogenous captives allow for various professions or employers to subscribe. There are also greater fraternal effects in a homogenous captive because generally, the bricklayer wants to do what the other bricklayers are doing.

At Everlong, they offer both homogenous and heterogeneous captives. They also host annual banquets to bring cell members together to exchange information and share what has worked for them.