The Value of Medical Benefits
As an employer recruits top employees and works to retain top talent, compensation packages are extremely important. Typically, the conversation goes from income/wages to benefits and the main discussion will be centered around medical coverage and retirement. In many instances, the group’s medical costs will be an employer’s second or third largest line item in the budget. This makes it extremely important to work with a broker who is knowledgeable and has access to all options in the medical benefit arena.
Traditional PPO Plans
- PPO Copay plans or “Preferred Provider Organization” plans, are one of the most popular types of plans in the Individual and Family Market. PPO plans allow you to visit whatever in-network physician or healthcare provider you wish without first requiring a referral from a primary care physician.
Traditional HSA Plans
- A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit.
- A dual plan is where the employer sets a defined contribution to its employees and lets the employee choose between a PPO plan or HSA plan. This allows the employee to feel as though they are getting a choice in the medical benefit process.
Small Group Self-Funded
- This type of plan allows an employer to get out of the community pool and potentially get significantly better rates. This will most likely be a canned product where the premiums are level and the insurance company is acting as both the administrator and the reinsurer.
Large Group Self-Funded
- This product allows the business to purchase administrative services from a TPA and reinsurance from a carrier and writes their own plan design. This type of chassis can provide great rewards but also some exposure to higher risks.
- We firmly believe that if a business is somewhere between 75-250 insureds and wants to be self-funded then a captive pool is what they should review. Captive pooling will allow businesses to band together to purchase benefits jointly at a 3,000+ member level not the traditional 80 members. Over the next 5 years we anticipate this method will be the largest growing segment in the industry.
- New for 2020, the Individual Coverage HRA (ICHRA) allows employers the opportunity to increase flexibility and employee choice by designing a reimbursement plan for their employees individually purchased health insurance. ICHRA will integrate with individual health insurance to provide business owners with a great alternative when it comes to providing health benefits. This type of plan provides a health benefit to better fit the needs of many businesses. Overall, this option helps to streamline benefit options and cut costs without reducing value when it comes to health benefits for employees. In the right situation, the ICHRA is a viable means for an employer to provide some level of employer-provided health benefit.