It’s no secret that healthcare costs can have a large impact on companies’ finances. Those businesses that are embracing healthcare consumerism principles are successfully combating that and reducing their healthcare expenses – and those of their employees.
Consider this: The premium on a traditional HMO offered by a company might be $1,000 per month for a family, and the employer may pay $700 and the employee $300. $700 per employee multiplied by all of a company’s employees can total a large sum of money. In addition, once an employee adds in all of his co-pays, co-insurance costs and out-of-pocket expenses, including his potential $1000 deductible (yes, deductibles in HMOs are rising too), he, too, is looking at a significant amount of money. And statistics show that currently 85 percent of Americans are paying these costs with their post-tax dollars.
Businesses have an opportunity to not only reduce their costs but also positively impact the lives of their employees with a consumer-directed healthcare plan, like an HSA. The premiums on these kinds of plans can be up to 30 percent lower than on traditional plans. In addition, the employee allocates pre-tax dollars to his account, saving him money, coupled with what an employer might contribute – which still totals less for an employer than what it would with a traditional plan like the one described in the HMO scenario above. With these types of consumer-focused options, healthcare costs will be less for the employer AND the employee. In addition, the annual premium trends on traditional plans have averaged over 10 percent since 2000, while the annual premium trends on consumer-directed healthcare plans have been around three percent.
As companies are evaluating their benefit programs and healthcare options, the addition of consumer-directed healthcare offerings like HSAs should be a strong consideration – for the benefit both of the employer and its employees.
Wednesday, July 2, 2008
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