High Deductible / Health Savings Account Plans as a Savings Weapon
High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA) tend to scare the crap out of many employers. The HDHP/HSA form of health insurance was signed into law in 2003 by then President George W Bush amid a fair amount of criticism. Critics felt that the plan put too much out-of-pocket burden on the employee because of the high deductible that must be met before the plan takes over (Deductible for individuals generally start at $1,000 and $2,000 for families). Gregory Boop from About.com has a good general information article on High Deductible Plans & Health Savings Accounts. What scares employers is the potential outrage from employees fueled by the misconception that the employer is providing less benefit by offering a HDHP/HSA health program.
When it comes to Health Insurance the employer must examine the employee base. In many cases a stand-alone HDHP/HSA health program will not provide sufficient benefit for every employee. However, if utilized as a secondary option to a HMO or PPO, the HDHP/HSA can add significant value to the organization’s benefit program. Most health insurance carriers will allow a business to offer two health insurance programs with as little as five participants. Furthermore, in New York State, the employer is only obligated to pay 50 percent of the single premium for the lowest plan. The HDHP/HSA program can provide relief to cash strapped employers who still want to provide health insurance.
So is a HDHP/HSA plan right for your organization/family? HDHP/HSA programs were set up for a very specific purpose, to provide a cost effective insurance plan for young, healthy adults that do not need medical care on a constant basis. Individuals with chronic care needs or young children who utilize their health insurance policies on a daily, weekly or even monthly basis will be hardpressed to benefit from a HDHP/HSA program.
Please take the time to read through the two following links to better prepare yourself for making a decision on an HDHP/HSA health plan:
HDHP pros & cons from Mayoclinic.com
Health Savings Accounts pros & cons from Suite101.com
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Thank you,
Ryan H.
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