A Sponsor may choose to self-insure and pay all medical, hospital and medical repatriation costs directly through a captive insurance company or in conjunction with an excess or stop loss policy underwritten by a local general insurer.

Where a Sponsor does not have access to a captive insurer then rent-a captive is a viable alternative. The Sponsor pays a fee for access to the captive facilities and provides some form of collateral so the rent-a captive is not at risk from any underwriting losses. Agency captives formed by insurance brokers are also available.

If paying claims through a captive or general insurer, fringe benefits tax will be payable, plus stamp duty, GST on premiums, and Medicare Levy Surcharge where applicable

Retaining risk and running an in-house health arrangement is permitted by the Immigration Department.

There is no requirement to transfer the risks to a health fund.

Self-insurance is suitable for large groups, but for a business with only a small number of 457 visa employees this is a considerable financial risk, even allowing for “immediately necessary” treatment in public hospitals as provided for employees covered by Medicare Reciprocal Agreements.