Symbiotic retention

When a group of higher education institutions was looking to cut costs on health care benefits, it formed a group captive in Vermont.

Author: Vermont Captive

Teacher giving a lecture to a classroom
Higher education institutions can turn to captives as an effective and affordable solution to serve their insurance needs.

When it comes to pursuing higher education, many people’s immediate thoughts turn to the lofty price tag.

“Higher ed has always been under a lot of scrutiny in terms of being able to provide a quality education at an affordable price,” said Tracy Hassett, president of edHEALTH — an “employee health care solution for higher education and secondary schools,” according to its mission statement.

“Higher ed is open to looking at alternatives for funding some of their operational expenses,” Hassett continued.

One of these alternative solutions is the implementation and utilization of captives, or a group captive.

For higher ed entities looking to create or partake in a captive or group captive, the State of Vermont is an optimal partner. Not only is Vermont a stakeholder in the higher education space but its involvement in higher education risk transfer and retention has grown over the years.

“There is a long, productive relationship between higher education and captives, certainly here in Vermont,” said Christine Brown, director of captive insurance, Department of Financial Regulation, State of Vermont.

edHEALTH is just one example of how captives and institutions of higher education can collaborate and discover innovative solutions to address their insurance needs.


The use of captives is particularly beneficial when it comes to insuring risks or meeting challenges that can be difficult to find coverage for. In the higher education space, the challenges come in multitudes, according to Hassett.

In particular, Hassett mentioned the newer risks that emerged as byproducts of the pandemic as notable hurdles for the sector.

“With COVID, and not having faculty, students or staff on campus, that created a whole new set of potential liability,” Hassett said. “Cyber [risk] is one that exploded, particularly in higher ed with everyone working remotely.”

For institutions with specific risks and a hardening market, turning to a captive provides benefits.

“Having an insurance company that they own — a captive — allows them to better control the coverage and the price to better protect everyone on campus,” Hassett said.


    • Vermont group captive edHealth provides better health care benefits for faculty and staff. 
    • Group captives allow higher ed institutions to fill coverage gaps in a more affordable way.
    • The importance of relationships when developing a captive cannot be overstated.

tracy hassett

“The only way to have a successful captive is to make sure that you have trust and relationships.”

-Tracy Hassett, president, edHEALTH

“By owning a captive, an institution can really tailor its coverage to meet the needs of the institution, its employees, volunteers and stakeholders,” Brown said.

Brown specifically noted how captives address the needs of liability coverage, from medical professional liability to legal liability and more.


The year was 2008, and the Affordable Care Act was about to be signed into law. A group of colleges in the New England and New York area, looking to reduce their costs, began discussions about what was one of their most significant expenses: health care benefits for their faculty and staff.

A consultant was hired to conduct a feasibility study to identify various solutions and determine which would be the optimal route to take.

“The feasibility study results came back and suggested that we start a group captive for our members to put our medical stop-loss into, domiciled specifically into the State of Vermont,” Hassett said.

While the conversation about looking into an insurance solution was opened in 2008, the launch of edHEALTH did not take place until 2013. Fortunately, this worked in the group captive’s favor, as by that time, the group already had six universities interested in joining.

Fast forward to today, and edHEALTH has not only been launched — it’s thriving.

“When we launched, we had six schools,” Hassett said. “Today, we have 25.”

And, as edHEALTH is about to mark its 10th year of existence, the group captive is proud to note that it has a 100% retention rate and has saved its members more than $150 million in coverage costs.


Given the prosperity edHEALTH has experienced, Hassett said that the group has been asked many times about the secret to its success. Hassett said it comes down to relationships.

“It’s all relationships — all the members have to trust each other,” she said. “It’s relationships with the advisors, our business partners, regulators. The only way to have a successful captive is to make sure you have trust and relationships.”

And while Hassett said the birth of edHEALTH originated from a need to save money, the mission of the group captive has become much more than that.

“Health care is about the wellbeing of our faculty and staff, so we have a very strong focus on making sure we’re providing programs that our member-owners can implement at their schools,” Hassett said.

And in aiding universities and their faculty and staff, edHEALTH has been able to drive health care costs down. The captive follows a holistic approach that addresses its members’ financial needs as well as their wellbeing needs.


What can other group captives in the higher education space learn from edHEALTH? According to Brown, the takeaways are endless.

Brown praised edHEALTH for its ability to cultivate meaningful relationships and communication within the captives space: “From the regulator perspective, it shows that they’re being thoughtful and pragmatic in the decisions that are being made through the use of the captive.”

The communication that is so valuable to the captive’s success does not apply only “with brokers and carriers but with service providers and other industry partners” as well, said Brown.

“[Captives] are not just for larger companies,” said Brittany Nevins, captive insurance economic development director for the State of Vermont’s Department of Economic Development.

“Nonprofits, educational institutions and government entities can all benefit from captive insurance. They can provide a significant ripple effect in local economies and produce great economic benefits,” she said.

Hassett noted that, on a personal level, being able to save universities money and in turn making education more affordable means a lot to her.

“As somebody who has put three kids through school, it’s thrilling to me to be able to help schools save money so that they can put more resources toward their students and to know that schools want to do it as well,” she said.

By: Emma Brenner

Reprinted from the May/June 2023 Risk & Insurance Vermont Report 

View the original article at

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