| 1. Health Savings Accounts (HSA)This is a | | | | spending billions on the future and their quality |
| strategy where the employer buys a health plan | | | | control is promising.5. Offering Blue Cross and |
| with a large deductible. Typically, these are groups | | | | Kaiser side by side. Blue Cross has a new |
| that are coming from a plan with a very low | | | | program where only five employees need to |
| deductible. Since the higher deductible plans are | | | | enroll with Blue Cross. The rest can be with |
| usually much less money, the money saved is | | | | Kaiser. This is a ground breaking opportunity in |
| used to put into the employee's "Health Savings | | | | flexibility.6. Blue Cross Elect. Blue Cross has a |
| Account." The money in this account is used by | | | | portfolio called Elect with 16 plans in it comprised |
| the employee to pay qualified medical expenses. | | | | of HMOs, PPOs, and an EPO plan. Each of these |
| If it's not used, the money rolls over to the next | | | | plans is priced from low premiums up to a much |
| year. The money belongs to the employee, even | | | | higher premium.The beauty of this program is |
| if they leave the company.2. Health | | | | that Blue Cross allows the employer to "define" |
| Reimbursement Arrangements (HRA)This is very | | | | how much premium they are willing to pay |
| similar to the HSA above but a portion of the | | | | towards an employee's cost. For example, Blue |
| qualified medical expenses not covered by the | | | | Cross offers a $10, $20, $25, $30, $35, and a |
| insurance is "pledged" by the employer, that is, | | | | $40 copay PPO plan. The $10 plan is the most |
| the employer only spends the money, if there is | | | | expensive of this group.After viewing all of the |
| a portion of the bill not paid by the insurance. This | | | | premiums for the various plans, the employer can |
| would be more favorable to the employer since | | | | establish, arbitrarily, which plan they are willing to |
| on an HSA the money goes to the employee, | | | | pay, say the employee only premium for. In this |
| whether there are claims or not. The problem | | | | case, let's say it's the $25 copay plan. The |
| with HRAs is that there are very few carriers | | | | employee can buy the $25 copay plan and it |
| that offer them right now.3. Medical | | | | doesn't cost them anything. However, if they |
| Reimbursement AccountsThis is very similar to | | | | want the more expensive $10 copay plan, the |
| HRAs above and extremely flexible. It's otherwise | | | | employer would payroll deduct the difference in |
| known as partial self-funding. Employer buys a | | | | premium costs.Let's say they have dependents |
| larger deductible and if the employee uses up that | | | | they want to cover but the employer only wants |
| deductible, the employer pays all or a portion of it, | | | | to pay for the employee only. The employee |
| depending on how a pre-arranged agreement is | | | | could take the lesser expensive $40 copay plan, |
| written. This goes for other expenses not paid by | | | | and use a little bit of the savings to help them |
| the insurance. The idea is that the employer self | | | | with the costs of adding their dependents.This has |
| insures the typically smaller expenses with their | | | | been a highly successful program because it gives |
| own cash, (presumably, the savings in premium | | | | the employees a greater number of choices, |
| dollars from going to a higher deductible.) The | | | | helping the employees be more definitive in their |
| downside to this is that many carriers prohibit the | | | | costs and needs, and at the same time, allows |
| use of this strategy with their plans. It can be | | | | the employer to more efficiently define their |
| very effective but make sure you use an | | | | costs.This information is time sensitive and can |
| experienced third party administrator as there | | | | change at anytime. If you have a question or |
| may be some legal and tax documentation | | | | need more information, please contact me at - |
| required. Otherwise known as Section 105.4. | | | | Todd RichTodd Rich is an expert on California |
| Kaiser.More and more groups are moving to | | | | Small Group Health Insurance Plans and has |
| Kaiser. It is typically, benefit for benefit, less | | | | written four books on the subject. |
| money than just about every other plan. Kaiser is | | | | |