More Bang for Your Benefits Buck!

The Centers for Medicare and Medicaid Services project that the $3.6 trillion our nation spent on healthcare in 2018 could approach $6 trillion by 2027. If that number has you wondering how your health plan (and our economy) can possibly survive such an increase, you’re certainly not alone.

Fortunately, you and your employees have an employer-sponsored health plan to depend on. And if your plan is self-funded like most, you have the freedom to determine how best to spend your healthcare dollars and the flexibility to respond to member’s needs. So rather than worrying about things that are out of your control, let’s look at steps others are taking to get more bang for their benefits buck.

Health Savings Accounts have become a must for employers pushing high deductible health plans. Contributing $500 or more to HSAs softens the impact of higher deductibles, and helps plan members cover out-of-pocket expenses and save for future healthcare expenses.

Covering the cost of Preventive Drugs at 100% is another option to consider. More and more employers are finding that waiving these copays can help speed recoveries and avoid some serious health problems that can cost everyone more down the road.

More Personalized Communication is the only way to deal with the reality that even with the availability of web portals, mobile apps and online transparency tools, health benefits are complex and confusing. Employers simply must do more to help members find out about their health benefits and understand them better. A public facing website could be a great way to not only explain your offerings to members, but also help to attract and retain qualified talent.

Direct Primary Care and requiring the use of Alternative Sites of Care for certain high-cost surgeries or second opinions are also discussed in this newsletter. TPAs have been recommending these strategies to many self-funded health plans in recent years and both are beginning to show positive results, depending on the makeup of the employee population.

Reference Based Pricing and Worksite Wellness programs are options we have discussed at length in recent years and both can be extremely effective. To learn more about these options and for other ideas you may want to place on your radar screen, contact your account representative. Spring is the perfect time to start thinking about next year!

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Traditional Plans Decrease

stethescope for healthcareSince 2007, adults ages 18 to 64 with employment-based coverage have increasingly chosen High Deductible Health Plans (HDHP), both with and without Health Savings Accounts  (HSA), over traditional plans.

In 2017, the number enrolled in HDHPs without an HSA rose to 24.5%, while HDHPs with HSAs rose to 8.9%. Some employers are choosing to only offer HDHPs, helping shift employees away from traditional plans.

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Rapid Growth for HSAs

hsa-piggy-bankHealth savings accounts are hot, with nearly two-thirds of respondents to a Plan Sponsor Council of America survey saying they believe that even those without a high deductible health plan should qualify. A benefit often cited by employers and employees alike is that HSAs can be a valuable part of one’s retirement strategy, since healthcare expenses are viewed as one of the largest people face in retirement.

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HSA Contributions Remain Tax Deductible

hsaEven though employer and pre-tax contributions to Health Savings Accounts (HSAs) are becoming threatened by the looming Cadillac Tax, after-tax contributions continue to be deductible.

While individuals can deduct unreimbursed medical expenses on Schedule A of their federal tax return, the expenses must exceed 10% of adjusted gross income before they are deductible. Qualifying contributions to an HSA, however, are deducted from gross income to determine adjusted gross income and not reported as medical expenses on Schedule A. As a result, after-tax HSA contributions are not limited by the 10% floor or income phase-outs that impact itemized deductions.

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