With the cost of medical and dental services trending higher every year, employers are finding it increasingly difficult to either offer employee benefits or maintain the coverage levels originally offered in their plans.
As a result of these higher costs, employers are looking for alternatives and some are turning to Health Spending Accounts (HSA) as a cost-effective alternative or supplement to traditional employee health and dental plans. HSAs can provide real value to a workforce with diverse needs by offering a broader range of coverage over traditional plans, giving the employee more control when it comes to making decisions that affect their own health.
Once the decision is made by the employer to move to an HSA and the coverage limits and parameters are set, the administration is limited to informing the administrator of new and terminated employees. All claims are submitted directly to the administrator by the employee where they are adjudicated and employees are reimbursed directly. The cost of this service is quite small compared to a fully insured plan, typically; around 10% of claims. As a result, a larger portion of your funds is allocated to paying claims and less to administration and commission.
With a fixed cost set for each employee, employers can enjoy cost control and budget certainty knowing what their maximum cost will be for the coming year. If the claims are lower than the set limit, those funds come back to the employer. Best of all, there is never an annual renewal to deal with.
In addition to an HSA, pooled benefits; such as group Life, AD&D, LTD and CI can all be offered on a standalone basis through a traditional group insurer, giving your plan the look and feel of a traditional benefit plan but at a fraction of the cost.