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Council hears captive stop-loss option to limit spikes from single high-cost cases
Summary
BKCy described joining a stop-loss captive (Pareto Captive) to gain protections including a 30% annual stop-loss cap and a "no new laser" guarantee; council members asked about trade-offs and local-provider access before approving the overall package.
BKCy told the council that a stop-loss captive offers protections and ancillary services that typical commercial stop-loss contracts may not, including member education, conferences and a dividend-like return. The presenter described the captive benefit as a risk-management tool that also imposes membership terms: "Once the employer is in the captive and assigned, they can never get a laser," the presenter said, adding the captive structure also includes an annual stop-loss rate cap of 30 percent.
The presentation compared the captive option with the traditional stop-loss market and cautioned that lower-cost 12/12 contracts can carry risks such as a one-off "laser" assessment (the presenter used a $300,000 laser as an example). Council members asked questions about cash-flow smoothing, potential exposures during the run-out period and whether employee premiums would change; BKCy and city management said premiums are intended to remain close to current levels and that staff will return with final rate assignments.
