Health Insurance Times

In the example shown above, the employer’s previous insurance had a $15 office copay and a $250 hospital copay HMO with 60 employees on the health plan.  Premiums were roughly $400 for an individual, $800 for a two-person and $1200 for the full family, split 75/25 between employer and employee. 

By moving to the $2,000 deductible plan, the premiums dropped by 25% or about $144,000/year.   The employer was willing to help his employees with the bulk of that deductible ($1500 for when/if expenses occur) provided the employees were willing to engage in the targeted health activities.

Here’s how it worked.  Employees pay the 1^st $500 of the deductible with the employer paying part or all of the remaining $1500 based on which health activities they engaged in.  If the employee completes the Health Risk Assessment, the employer pays $300 of the $1500.  If, in addition, the employee completes the Primary Care Physician Visit, the employer is obligated for another $300 and so on up to the limit.

The more health activities completed, the less the likelihood employer and employees will be obligated for deductibles. The employees will become healthier which benefits everyone.

The extra cost to the employer?  $3600 or 2½% of the annual savings.

If you already have a Health Reimbursement Arrangement or HRA, you’re probably giving away the reimbursement.  When employees earn that reimbursement, everyone wins.

This is an excerpt from an article I wrote for the February 2011 Issue of National Healthcare Reform Magazine.