As Health Care premiums continue to rise, Employers who provide Employee Benefits are always looking for innovative ways and alternatives to save money on premiums. Increasing the deductibles and Out-of-Pocket maximums seemed like the only alternative. Unfortunately, the unintended consequences to that included low morale, lower productivity, and high turnover of key employees who went to competitors. Something needed to be done to alleviate this problem. One such solution was the introduction of the Employer sponsored Health Savings Account. While HSA’s can help narrow financial gaps, they don’t address the full financial risk. The average deductible is $2,500, while the average annual HSA contribution is $750. The time it takes to build up a fund large enough to cover out of pocket costs can leave Employees with timing gaps which defeat the original purpose. Employees need and value the security of Health insurance coverage provided by their Employer, especially for unexpected medical conditions such as Cancer, a Heart Attack, Stroke or an Accidental Injury which can rack up enormous medical bills, and additional out of pocket personal expenses not covered by their insurance plans.
Employers can’t afford the rich plans of yesterday, nor can they afford to ignore the financial burdens an employee faces with the higher deductibles and out of pocket costs. What can Individual’s and Employers do to address the financial strains caused by coverage gaps, while also keeping an eye on the costs and budget? Several Insurance companies have developed innovative, cost effective and affordable Supplemental Insurance Plans, which pay an amount pre-selected by the insured, with payments mailed directly to their home, to cover deductibles, co-insurance maximums and other illness or accident related expenses.
Employers can reallocate HSA contributions into these more valuable plans, or use as an enhancement to attract new employees. Employees can continue to contribute to their HSA, or pay for these plans directly.
It would be wise to consult a tax professional to see if these plans are right for you, your family, and/or your business. to