| What are some the latest Strategies being used by | | | | Section 105. |
| Small Business owners in California to make their | | | | 4. Kaiser. |
| group health insurance premiums more efficient? | | | | More and more groups are moving to Kaiser. It is |
| 1. Health Savings Accounts (HSA) | | | | typically, benefit for benefit, less money than just about |
| This is a strategy where the employer buys a health | | | | every other plan. Kaiser is spending billions on the |
| plan with a large deductible. Typically, these are groups | | | | future and their quality control is promising. |
| that are coming from a plan with a very low | | | | 5. Offering Blue Cross and Kaiser side by side. Blue |
| deductible. Since the higher deductible plans are usually | | | | Cross has a new program where only five employees |
| much less money, the money saved is used to put into | | | | need to enroll with Blue Cross. The rest can be with |
| the employee's "Health Savings Account." The money | | | | Kaiser. This is a ground breaking opportunity in flexibility. |
| in this account is used by the employee to pay | | | | 6. Blue Cross Elect. Blue Cross has a portfolio called |
| qualified medical expenses. If it's not used, the money | | | | Elect with 16 plans in it comprised of HMOs, PPOs, and |
| rolls over to the next year. The money belongs to the | | | | an EPO plan. Each of these plans is priced from low |
| employee, even if they leave the company. | | | | premiums up to a much higher premium. |
| 2. Health Reimbursement Arrangements (HRA) | | | | The beauty of this program is that Blue Cross allows |
| This is very similar to the HSA above but a portion of | | | | the employer to "define" how much premium they are |
| the qualified medical expenses not covered by the | | | | willing to pay towards an employee's cost. For |
| insurance is "pledged" by the employer, that is, the | | | | example, Blue Cross offers a $10, $20, $25, $30, $35, |
| employer only spends the money, if there is a portion | | | | and a $40 copay PPO plan. The $10 plan is the most |
| of the bill not paid by the insurance. This would be | | | | expensive of this group. |
| more favorable to the employer since on an HSA the | | | | After viewing all of the premiums for the various plans, |
| money goes to the employee, whether there are | | | | the employer can establish, arbitrarily, which plan they |
| claims or not. The problem with HRAs is that there are | | | | are willing to pay, say the employee only premium for. |
| very few carriers that offer them right now. | | | | In this case, let's say it's the $25 copay plan. The |
| 3. Medical Reimbursement Accounts | | | | employee can buy the $25 copay plan and it doesn't |
| This is very similar to HRAs above and extremely | | | | cost them anything. However, if they want the more |
| flexible. It's otherwise known as partial self-funding. | | | | expensive $10 copay plan, the employer would payroll |
| Employer buys a larger deductible and if the employee | | | | deduct the difference in premium costs. |
| uses up that deductible, the employer pays all or a | | | | Let's say they have dependents they want to cover |
| portion of it, depending on how a pre-arranged | | | | but the employer only wants to pay for the employee |
| agreement is written. This goes for other expenses | | | | only. The employee could take the lesser expensive |
| not paid by the insurance. The idea is that the | | | | $40 copay plan, and use a little bit of the savings to |
| employer self insures the typically smaller expenses | | | | help them with the costs of adding their dependents. |
| with their own cash, (presumably, the savings in | | | | This has been a highly successful program because it |
| premium dollars from going to a higher deductible.) The | | | | gives the employees a greater number of choices, |
| downside to this is that many carriers prohibit the use | | | | helping the employees be more definitive in their costs |
| of this strategy with their plans. It can be very | | | | and needs, and at the same time, allows the employer |
| effective but make sure you use an experienced third | | | | to more efficiently define their costs. |
| party administrator as there may be some legal and | | | | This information is time sensitive and can change at |
| tax documentation required. Otherwise known as | | | | anytime. |