While noble in its stated goals, the immediate impact of PPACA (Health Care Reform) is a substantial increase in costs for small employers and their employees. New taxes and regulations more specifically target fully insured plans, so employers that are not large enough to partially self fund their benefits plans are most significantly harmed. However, there is an available strategy that enables an employer to lower costs while improving employee benefits.
Installing and servicing this creative strategic design requires:
- a broker/consultant’s willingness to sell less insurance and
- a broker/consultant’s ability to manage the moving parts of a customized plan.
Each plan allows customized design however there are some components that are standard to its success.
- Employer purchases a High Deductible Health Plan with 100% coinsurance.
- Employer and employee combine their resources to pay smaller claims that are adjudicated by a Third Party Administrator.
- Debit card replaces traditional point of service co-pays.
The premium savings that are enjoyed in a High Deductible Health Plan might be deployed as first dollar claims coverage for an employee that has, in the past, been responsible for a co-pay and coinsurance plan.
An employer with 30 employees was facing a 28% rate increase. Creative plan design afforded this employer an estimate of $100,000 in annual savings while cutting the employee maximum out of pocket in half. Even in a worst case scenario, this employer’s maximum cost in the new design is $54,000 less than the fully insured renewal premium. Actual case study available upon request.
GBE&W Thoughts and Musings 