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Every few weeks, I am showcasing a different advantage of owning a Health Spending Account in this segment called…
HSA Advantage….
Cutting back your group benefits plan is the last thing you want to do as an employer. Unfortunately, the rising costs associated with group benefit plans over the past few years has forced many employers to scrap their plans or cut specific coverage to control costs. Many times, this is done without looking at the true claims and determining where a better plan could actually enhance the coverage while saving money.
Before you cut, you should look at how your plan truly functions. A good start is the claims by category. If you see that certain areas of your plan are experiencing higher claims versus others, you may want to re-adjust the plan limits and incorporate a Health Spending Account to contain costs. For example, let’s say that a plan review shows that costs associated with paramedicals (massage therapy, acupuncture, etc..) are rising whereas dental claims are staying level. Now let’s assume that dental claims have not reached anywhere near the plan maximums. In this situation, it is clear that paramedicals are much more popular with your employees. Obviously, you don’t want to cut paramedicals from the plan. But you could replace the coverage with an HSA.
This strategy allows you to keep the plan whole while implementing a fixed cost for an area of your plan where claims are increasing. Remember, your overall premium next year is based on what the insurer expects you to incur from what they are insuring. If you are seeing an increase in paramedicals then this will be reflected on your next renewal as an increased premium. By removing the coverage from the insured plan and providing coverage using a fixed dollar for the true cost of the claim, you are containing these costs while still keeping the coverage.
Using a Health Spending Account to cover paramedicals as a replacement to the insured plan coverage could save you significant money at renewal and contain costs long-term. As a result, you may want to take the savings and provide more money in the HSA for each employee as a top-up - seeing how the additional amount you provide in HSA dollars will not negatively impact your premiums down the road. Now you are controlling costs and enhancing your plan…who’s going to win employer of the year this time around?
