Strategy #1 – “Traditional” HMO, these plans typically offer the lowest level of “out of pocket” expense to the employee and are the most common offering in the “small group” market. $15 office visits, $50 emergency room visits, $150 outpatient surgery co-pay, $250 inpatient hospital co-pay, $10/25/45 prescription co-pays. Of course these co-pay amounts can vary between different carriers and plans.
Strategy #2 – HMO with increased co-pays or deductible for in and outpatient hospital services. While office visit and emergency room co-pays remain consistent with a “Traditional” HMO a $1000 deductible could apply to other services. A deductible on prescriptions could further reduce premiums. These plans represent a shift to a “consumer driven” approach with employees sharing in the cost of their care.
Typically a savings of 20% can be recognized by employing this strategy.
Strategy #3 – Buy-Up. Many carriers will allow the “Traditional” HMO to be offered alongside strategy #2, giving interested employees the chance to “Buy Up” to the previous level of benefits. Company subsidy would be based on the new plan premium with the employee paying 100% of the difference.
Strategy #4 – HRA or Health Reimbursement Arrangement. This option involves the employer adopting an “Upfront Deductible” health plan (HMO or PPO based) and buying back a portion of that deductible. This strategy can soften the blow of going to the upfront deductible plan while providing a long term solution to rising costs. These plans are extremely flexible and can be designed to meet a group’s specific needs while remaining simple for the employee to understand and easy for the employer to administer.
Strategy #5 – HSA arrangement. Under this plan the company would adopt an “HSA Compliant” high deductible health plan (Usually PPO or POS based) plan participants could then defer salary into the HSA account on a pre tax basis. Those funds could then be accessed to offset the plan deductible when care is needed. Unused funds can “roll over” year-to-year. Other options exist to allow the employer to help “seed” these accounts or provide for a level of “personal medical expense” each year. Medicare eligible persons are not eligible for HSA’s.
Like option #2 these plans can also be offered alongside “traditional” HMO’s as a buy-up option.