This option is another type of retroactive program that goes hand-in-hand with a large healthcare organization’s multi-year policy exposure, good loss experience, and strong risk management program. It has less risk than other traditional retroactive programs providing premium back or your payment of additional premium after the policy period’s end per designated losses.
With a profit sharing program, your organization participates with the potential of a defined tier of profit based on actual program-term experience. Costs are built into the program, and no additional premium is owed at the end of the policy term for any worse-than-expected losses.
Your profit-sharing program structure’s tiers are based on your organization’s size, number of program policy years, and other factors. Each tier articulates a level of potential experience relative to potential profit sharing, such as: “for experience better than X percent, you get Y percent back as profit sharing.”