Contents
Making Do and Making Right
Further Reading
Quick Poll–Review
July Quick Poll–Vote
Contact Information
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Making Do and Making Right
—Alternative accounts help employers provide unique benefits
With healthcare costs taking bigger bites out of employer budgets, managers everywhere grapple with spreadsheet aerobics, stretching to keep their budgets in balance while providing adequate employee benefits. Though it's not always an easy task, many successful programs are being conjured up by creative thinkers...approaches that keep costs down and employee satisfaction up.
- HRAs can provide flexibility
One innovative example comes from Freeport School District #145. It gives a contingent of part-time employees a Health Reimbursement Arrangement (HRA) account to use any time throughout the year, for whatever medical expenses they choose. If they don't use it, they don't lose it—the balance gets carried over to the next year. Unlike typical HRAs, these accounts are standalone and are not paired with any other benefits like a high-deductible health plan.
- HSAs offer tax savings
Employers that offer Health Savings Accounts (HSAs) to their workforce are providing their employees the potential opportunity for triple tax savings: Employees get a deduction for putting their own money into an HSA; they can invest the money and earn tax-free interest; and they can withdraw it tax-free, as long as it's used to pay for medical expenses. (Income and penalty taxes apply to withdrawals for nonmedical purposes.) The key benefit is that more employers are finding that these plans are helping them regain control of soaring health coverage costs, while employees are building a means to help them pay for medical expenses.
- RMSAs can help fill the gap for retirees
Other employers, wanting to retain retiree benefits but leery of skyrocketing costs, are looking at Retiree Medical Savings Accounts (RMSAs). These accounts are funded while employees are still working, but are used to pay for retiree insurance premiums and medical expenses after their termination, whether they are eligible for Medicare or not. Some employers credit a fixed amount on a yearly basis. Others match employee contributions. In some plans, unused HRA funds can be rolled over to the RMSA. Whatever the approach, RMSAs give employers a new tool to consider for their plan portfolio.
- Employee education can save money…and save lives
Helping employees understand their health risks, learn about overall fitness and nutrition, and be smart consumers is another approach that gives employers a great deal of flexibility while curbing plan costs. According to the Towers Perrin 2005 Health Care Consumerism Study, employees demonstrate more positive behaviors when their workplaces are committed to providing ample health care resources and decision support tools. Whether it's by providing fitness facilities or teaching new parents how to get the most out of doctor visits, these strategies help contribute to employee health and help contain employer costs.
- Pick-and-choose
Perhaps no single strategy is right for your business. If you need help reviewing the options, we can help you select from a smorgasbord of choices—and maybe even devise something unique just for you. Contact NIHP if you'd like to discuss a customized review of your plan.
Further Reading
- Health costs: Good news at last
- Higher copays and slower price hikes have already helped companies. Now many are investigating new ways to find more savings through family accounts, generic drugs, and more.
- Lincoln Plating benefits from strategic wellness program
- When Lincoln Plating introduced a health reimbursement account (HRA), they were surprised to find that 70% of their employees participated. The employees felt confident in their health status, and they knew if they didn't spend it all, they could roll the money over.
- Kobelco takes a big swing at consumer-driven health
- Kobelco of Calhoun, GA had a significantly higher level of medical benefits than its owners preferred, and a decision was made to radically change how its benefit program was designed. The company makes an initial contribution to every employee HRA, and makes a second contribution to the account if the employee creates an FSA and makes a minimum contribution. Linking additional HRA funds, which roll over, to a positive action by the employee is significant.
- CDH plan design tip: Use an HRA to bridge the benefits gap
- Employers recognize they have to provide good benefits to retain employees, be competitive and maintain a healthy employer-employee relationship. One solution is using an HSA and a post-deductible HRA that effectively shifts some of the health plan costs to the employees.
A Quick Review of Last Issue's "Quick Poll"
—Almost half of readers need to check dependent eligibility more frequently
When we asked our readers how often they confirm their employees' list of dependents, a surprising 45% said they never do so or do so only at initial enrollment. Based on the importance of meticulous record keeping, this gives many of you an action item that should be moved up on your priority list. To keep your information as accurate as possible, NIHP recommends annual confirmation.
If the undertaking seems monumental and you're a client of NIHP, let us help. We regularly handle this arduous task for our employers, helping them prevent overpayments and minimize mix-ups.
If you're among the 34% of readers who make this issue a priority…congratulations! Great job.
Here's a look at the poll's complete results:
How often do you confirm your employees' list of dependents?
All respondents:
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28%
Only at the time of initial enrollment |
21%
Once a month |
13%
Once a year |
21%
Every 2-3 years |
17%
Never confirm the list |
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July Quick Poll–Vote
What percentage of health plan costs are you currently directing back to your employees?
(Click a response to vote. Answers are strictly anonymous.)
Then, visit the NIHP website to view this issue's quick poll results.
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