Back in 2004 when HSA plans made their debut, most employers made the switch, including myself. It made absolute sense. The savings in moving from a traditional plan was so great that employers were fully funding the employee’s deductibles, and still saving a ton of money. It was a no brainer…..then something changed. Because so many people moved to the HSA platform, it skewed the amount of claims that these HSA plans experienced. The premium increase in the next few years were ugly, almost 50-60% in some cases.
Group Health Insurance is not cheap, but strategy is key
Its been 14 years since HSA plans were introduced and the pricing have leveled off. Employee Benefit HSA plans are not the screaming deal they once were, but still something to consider when an employer wants to look at being strategic. In my own agency, we offer Kaiser plans, the HSA Kaiser Bronze plan and some plans in the Silver and Gold tier. The Kaiser HSA Group Health Insurance plan pricing is between 30-50% cheaper than its Silver and Gold plans. Depending on your employee count, the ages of the employees, their dependents, etc, the monthly savings can be significant. There are some drawbacks to the HSA Health Plan model.
HSAs are great, but employee education is vital
If an employer is considering moving their employees to an HSA Group Health Insurance Plan, there are a few things to consider. With HSA plans, ALL services (except for yearly preventative visits) are full price until the yearly deductible is met. That means no more $20 or $30 copay to go to the doctor. No more $5 prescriptions. Employees pay the “negotiated rate” for the services they receive, until the deductible is met. That is a huge difference from the traditional Group Health Plan model.
Some strategies that help both employers and employees
Many employers will help “fund” their employee’s personal HSA savings accounts, to help offset the costs employee’s have to pay when they DO go to the doctor. Many times the savings that employers enjoy, allow them to share that savings with employees. Any money deposited into an HSA savings account is tax deductible and can be used for tons of things like prescriptions, office visits, massage, chiropractic, acupuncture, over the counter drugs, etc.
Even though the HSA Group Insurance Plans are not as inexpensive as they were years ago, its still worth business owners checking out to see if it would be a good fit.
Steve Brauer, Principal, Brauer Insurance Services, www.brauerinsurance.com, (877) 421-4325