1. WHY MID-MARKET MED?
Roundstone Management, Ltd. (“Roundstone”) is an insurance organization focused on the
development, underwriting and servicing of alternative risk products, including captives, rent-a-captives
and specialty insurance programs. Roundstone’s medical stop loss group captive program, Mid-Market
Med, was established in 2005 and entered into a Managing General Underwriter Agreement effective in
2012 with Nationwide. Through this inimitable group medical captive, mid-market employers share
risks and lower health care costs.
Given the changing medical insurance landscape under the Affordable Care Act (ACA), Mid-Market Med
is very relevant and a viable solution for many mid-market employers. The program offers:
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Comprehensive and turnkey services
Lowest collateral requirements and lowest management expense ratios
Top tier reinsurance partnership with Nationwide
In-House underwriting and MGU structure
Complete transparency in quarterly/annual reporting and financial accounting
Flexibility to work with virtually any TPA, network and wellness plan providers
Ability to structure heterogeneous, homogeneous and private-label captive cells
The best proof is in our results:
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An average 18% annual premium return
Never needing a collateral call
99% client retention
Directing 80-85% of a client’s health care spend to variable cost.
For employers who take an active role in managing risk, and are serious about driving ROI with their
health care vendors, we are the solution.

2. SMALLER GROUPS CURRENTLY FULLY INSURED
Smaller employers (less than 200 lives) have been slow to embrace self funding as it historically has only
made sense for larger groups. As January 1, 2014 approaches, many smaller employers are beginning to
realize that their most viable option may be to abandon the fully insured approach and switch to self
funding with a stop loss policy backstop.
Quickly increasing fully insured rates are the main concern for smaller employers. The new ACA
regulations will increase costs, and the predicted reaction by insurers will further frustrate smaller
employers. Rates are being driven higher by:
1. Mandatory coverage for additional health care services in addition to state-mandated benefits
that already push rates higher by 25%.
2. The way the ACA limits insurers in terms of rating bands will hurt the smaller employer with a
healthier than average group. Under modified community rating, the new law will soon prohibit
health risk as a factor with which to calculate premium rates for employer groups with less than
100 employees. Many smaller employers will see rates rise despite attempts to encourage
healthy habits and smart consumer choices.
3. While rates are rising, smaller employers will likely see even fewer coverage options in the fully
insured plans that insurers offer. They will want to move all smaller fully insured groups into
off-the-shelf plans. Insurers are looking to streamline their administration due to the new
minimum loss ratio requirements. This all means less flexibility in terms of plan design for
smaller employers.
Remember, a smaller employer that tries self funding and runs into problems is not frozen out of the
fully insured market as they might have been in the past. They can capture the savings and regain
control of their medical benefits year after year with self funding, and then return to fully insured if and
when that strategy makes sense.
Small businesses are getting surprised by the new government regulations that are both driving rates
higher and creating fewer plan design options. Perhaps it is time to give self funding a fresh look,
especially when the Roundstone captive approach makes it easy to take more risk without betting the
farm.