Health Savings Accounts
Rockie
2,136 Posts
We just received our renewal for next year and we have battled it down to a 19% increase. We are seriously considering an HSA. I am sure most of our employees will not like it, mostly due to lack of education and they also love the sacred cow drug card.
Those of you who have experienced this change ...did you totally switch to an HSA or did you continue to offer a traditional plan and an optional HSA? I have seen pros and cons to this.
I hate this time of year when we have to do the "health insurance dance" yet again and then get to try to explain to employees why their benefits are again being eroded because of expenses.
UGH!
Those of you who have experienced this change ...did you totally switch to an HSA or did you continue to offer a traditional plan and an optional HSA? I have seen pros and cons to this.
I hate this time of year when we have to do the "health insurance dance" yet again and then get to try to explain to employees why their benefits are again being eroded because of expenses.
UGH!
Comments
We did not offer dual options because the savings premiums isn't there with a "buy-up" arrangement. We maintained the plan we had except made it a high-deductible version, set up the HSA and the company contributes quarterly based on tier; and we added a reimbursement only HRA that reimburses the 1st 50% of the OOP max. We also pay 70% of premiums. Several moved to their spouse's plan, high users hate it, low-users love it. The fact is, even w/ high users, their total cash outlay is LESS than under the same plan last year. (It's easy to forget about all those co-pays that don't apply to the deductible) It's just all up front. Combined premiums, ER contributions, and HRA reimbursements (incl TPA admin) is reduced by 35% over last year, AND the money is going to the employees rather than the insurance company. Most employees didn't see a change in their net check, they moved the premium reduction to their HSA. We pointed out that even if the HSA money is going out as fast as its going in, it's "free" money or pretaxed.
We switched from a very rich HMO about a year ago. We only have 12 covered employees and the premiums were getting outrageous. We would pay 100% of employee premium, but they had to pay for any additional. The premiums were too high for many of them to afford to add their children or spouses. And we had a very healthy crew for the most part, so we felt the high premiums were being wasted.
Our agent had talked with our covered employees and identified 2 that he thought would need to maintain an HMO because of medical conditions. So we offered a high-deductible PPO with an HSA and then an HMO that was a significant downgrade from the one we were leaving. We cover 100% of the employee premium on the PPO and 80% on the HMO. We also make monthly contributions to the HSAs. Overall cost savings were 25-30%.
After about a week on the PPO, a handful of employees got spooked. They said they didn't completely understand how the PPO worked and would have chosen the HMO if they had understood earlier. Our agent really did do a poor job of explaining both options (he even admitted it) so our Insurance company was gracious enough to let me move 3 employees from the PPO to the HMO.
A month later, we had an employee who started having major back problems. About the same time, another employee was in an auto accident. With the program being so new, they had very little in their HSA. We worked with them and got them through it, but it created more ill will toward the PPO/HSA combo. When renewal time came up about a month ago, all but 2 employees moved to the HMO.
I think if we had done a better job of educating the employees at first, we would have more sticking with the PPO. Whether its true or not, our employees "feel" safer under the HMO. I'm not sure if even raising our contribution to the HSA would pull employees back to the PPO. We are considering only offering an HMO option next time.