Insurance deductible, income or benefit

metalbiz

With the rise in insurance rates the organization has opted for a plan with a higher deductible in order to minimize the monthly rates. The inpatient deductible has risen from $200 to $1000. We would like to know if the organization could pay the difference in deductible, $800, if any employee ends up being hospitalized. If the company pays the difference is it a taxable event to the employee or is it considered part of the benefits package similar to paying the medical premium?

marc

Sharon, you can supplement these high deductible plans with either Medical Savings Accounts, or Medical Reimbursement Arrangements. The Flexible Spending Accounts can also figure into the mix.
Your broker should have solid knowledge about these products because this sort of thing is coming fast to many of us. Sounds like you have already made the decision to do this - lots of stuff needs to happen to help your EEs be successful with this new plan.

Mostly it is educational assistance about using the plan, understanding when and where savings can happen, showing them how to shop for prescriptions and to ask providers if they will discount for cash with no insurance billings etc.

You should also consider having a Third Party Administrator if you go with any of those products I mentioned. Will save lots o headaches.

LarryC

I agree with Marc and would add another option that you apparently qualify for: Health Savings Accounts.

marc

I did mean Health Savings Account instead of Medical Savings Account. Good catch Larry.

I also so I did not answer you income question. If you set the HSA or HRA or FSA up properly they can be tax free and/or pre-tax. Again, your broker can fill you in on all the myriad, gory details.