With the ever increasing cost of healthcare continuing to drive up premiums, employers are finding success in reigning in premium increases with an option that has been around for more than a decade, but is finally yielding the desired results.  These are Consumer Driven High Deductible Health Plans.

These high deductible plans make the participants pay for their claims until they meet a high deductible, after which the plan will pay some or all of subsequent claims until the participant reaches their maximum out of pocket for the year.  Then the plan pays all claims for the rest of the plan year.  While these type of health plans have been around for years, it is only recently that a number of factors that have made these plans more popular. 

For one thing, employers are passing on more of the annual premium increases to participants.  For years employees avoided the high deductible plans in favor of copays for office visits, prescriptions and even hospital and out-patient treatments.  Now the amount that many employees are contributing through their payroll deductions have risen to a point that many have taken notice and have started to look for cheaper plans that still provide the coverage that they need. 

Second, the Affordable Care Act made all well care and preventive care free, even under the high deductible healthcare plans.  So while previously, routine physicals, mammograms and vaccines went against the deductible, now they are all free.  Other preventive care such as colonoscopies have also been added to the list of free services, where in the past they were paid by the participant until the deductible was met. 

Lastly, with the goal of reducing premiums, employers have started adding additional incentives for employees to enroll in the high deductible plans.  These plans allow the participants to put money into special bank accounts called Health Savings Accounts on a pre-tax basis and as long as the money is spent on approved medical related expenses, it is tax free.  Employers are increasingly offering employees the option to fund the Health Savings Accounts through pre-tax payroll deductions to simplify the process for them.  Also, as a further enticement, more employers are making company contributions into the Health Savings Accounts for the employees.

As enrollment in the high deductible healthcare plans has increased, the participants have become more consumer driven to reduce their claims expense since they are responsible to pay these costs until they meet the deductible.  More participants are electing generic drugs versus the much higher priced name brand drugs.  They are also more likely to check whether their plan covered the treatment and what the cost would be before having the care.  They also utilize online tools and resources offered by the plan, including Telemedicine (accessing a doctor by phone or online for diagnosis and treatment) to reduce costs.  In short, these Consumer Driven High Deductible Health Plans are finally achieving the objectives for which they were created more than a decade ago.

For more information on this topic as well as other employee benefit strategies, contact John Morlock (jmorlock@ttspro.com) to see how Total Team Solutions could help you save time and money.

ABOUT TOTAL TEAM SOLUTIONS:  Total Team Solutions is a full service Human Resources Outsourcing company helping small business manage their payroll, employee benefits and human resources needs to reduce expenses and save them time so they can focus on running and growing their businesses.  Based in Trumbull, CT, Total Team Solutions serves clients in Connecticut, Massachusetts, New York and New Jersey.