By Steve Selinsky, Director of New Business, Health Alliance Plan
Making the right decision about the best health insurance plan for your company requires an understanding of not only the constantly evolving Affordable Care Act (ACA), but also a clear vision of what options would make the best fit for your particular organization.
Among the health plan choices available today, a recent trend Michigan-based health insurer Health Alliance Plan (HAP) has seen among organizations is the adoption of high deductible health plans combined with health savings accounts (HSAs), particularly by small businesses (defined as businesses with up to 50 full-time employees). High deductible health plans and HSAs, while not a new option, are growing in popularity among business owners due to the rising cost of health care.
A high deductible plan is one in which that deductible threshold is higher than a traditional plan. The advantage of high deductible plans for many employees is that they come with a lower monthly premium. High deductible plans allow for the employee and employer to share risk, while keeping costs down for the employer.
HSAs often accompany high deductible health plans, as they can help alleviate some of the financial burden placed on the employee while helping them fully receive the value of the plan. An HSA is a medical savings account that can be used to pay for qualified medical expenses. It isn’t subject to federal income tax at the time of deposit, and unlike a Flexible Spending Account (FSA), funds roll over year to year if not spent. The HSA will also belong to the employee if they choose to leave the company.
Here are a few things to consider when considering high deductible health plans and HSAs, keeping in mind that one plan is not always right for every organization:
- Know your employees – Healthy employees will have different needs than those who have chronic health conditions. Look at your overall workforce to determine whether your employees are generally young and healthy, or if they are going to incur medical expenses regularly through ongoing healthcare needs.
- Consider the HSA limits and fees – The IRS sets HSA contribution limits. These limits include contributions made by both employers and employees during the year. For 2016, the contribution limits for individuals is $3,350 (the same as 2015) and for families is $6,750 (an increase of $100 over 2015 limits). While HSAs can be a smart way to set aside funds for medical costs, it’s important to be aware of the fees and policies associated.
- Understand the claims process – HSAs can be administratively complicated. You need to ask yourself if the process is administratively friendly, and if not, if your capacity to take on additional responsibilities is needed.
- Seek out and leverage worksite wellness programs – Look for plans and benefits that reward employees for engaging in health and wellness activities, as these make a proven, positive impact on health care costs for you and your employees. While each plan and carrier may have their own specific reward mechanisms, determining the right health plan carrier should be considered a holistic process that incentivizes your employees to stay healthy. Wellness in the workplace has been proven to reduce absenteeism, increase productivity and lower stress. HAP’s own worksite wellness programs range from health screenings to multi-week behavior change programs, all focused on educating and motivating employees to make healthy choices.
Steve Selinsky is Director of New Business for Health Alliance Plan, where he is responsible for all group new business sales for HAP.
To learn more about affordable healthcare plans for your small business, visit Health Alliance Plan.
For more tips, inspiration and Detroit small business stories, visit smallbusinesspulse.com.