Business has improved, but what can an employer do when their health insurance premiums go up over 45% at renewal on a budget that already exceeded $300,000 per year? One of our clients recently received their first renewal since the implementation of the Affordable Care Act and this is what they faced. Traditional options were limited so here is what had to be cobbled together for them:
- The base plan offered had to move to a $5,000 deductible plan with no first dollar benefits for physician or prescription claims.
- The gap plan, which was already in place, was continued because it offered first dollar benefits for hospital stays and / or outpatient surgery bills.
- The HRA plan, which offset some of the employee deductible charges in prior years, had to be discontinued to meet Affordable Care Act “actuarial value” requirements.
So far everything looked pretty bleak, but then we looked at other benefit options and here is what we were able to offer:
- Since some employees were able to pay higher premiums a “buy up” option was offered with a richer plan which had no deductibles, just copays.
- Unfortunately, other employees were unable to “buy up” and would be in financial distress long before meeting a $5,000 deductible, so a “buy down” option was created. The hospital indemnity plan offered did not meet Affordable Care Act mandates, but it would allow individuals to receive first dollar benefits for the bills they were most likely to incur.
- A Tele-Doc option was offered to all employees who enrolled in any of the three plans providing access to physicians by phone. Not only will this program allow employees to miss less time from work, but there is also no fee to access care from the convenience of their homes.
- An e-doc option was included to provide access to physicians by email and text for more detailed conversation about symptoms and treatment recommendations.
- Consumer Advocate benefits were added to offer help accessing the most cost efficient care and to help fight for cost reductions on services provided.
- A discount prescription drug plan was part of the package to help employees in any of the three plans to purchase prescriptions at the most affordable rate possible.
All of these options and features do not adequately replace the single major medical program that existed a few years ago, and the rates for both the base plan and the buy up plan selected were still well above the rate before the renewal. Previous renewal increases had been in the low teens so this employer got to see first-hand the impact of the Affordable Care Act this year. Because of the number of employees in this group, penalties for not providing a compliant and affordable plan, as defined by the government, would have been staggering and not tax deductible. This client had to be open to a lot of creativity in this required benefit package so these were the decisions for this year’s renewal. I shudder to think about what levels of creativity will be required next year.
If you would like to discuss a creative way to provide coverage, explore alternatives and be compliant with the ACA, please contact us at Czajkowski Dumpel & Associates, Inc. – We are here to help!