Consumer driven plans help employers assert individuality with health benefits

 

 

Every business is different. Their plan to control the cost of employee health benefits should also be unique.

 

Individuality is a trademark of self-funded plans. About 85 percent of employer health plans currently use some form of self-funding, according to the Society of Professional Benefit Administrators. The plans offer employers flexibility and allow them to save premium taxes and administrative costs. They also allow the employer to build reserves to cover future expenses.

 

Within that framework, consumer driven health plans have emerged.

 

They are based on employee empowerment, which takes into consideration that employees are better informed about their health choices and will research their condition, treatment and cost options before visiting a doctor.

 

According to Mercer Consulting research, employers are increasingly turning to consumer driven plans, and employees covered by the plans are giving positive feedback.

 

The plans provide employees with a designated health care account. This allows a company to contribute a flat amount annually. Because the amount is set, companies can better predict their health plan costs.

 

Employees draw upon their health care accounts for out-of-pocket medical costs. They are empowered through access to nurse help lines, Internet-based medical resources and other information to help with their choices for quality medical care.

 

Achieving the best medical outcomes reduce the need for additional medical care and its related expense.

 

Even more savings are realized from healthier employees through increased productivity and less absenteeism.

 

Employers look to their benefits manager to provide employees with easy access to health information and directories, and accurate and fast claims processing and assessment reports.

 

In July, the IRS and U.S. Treasury Department issued guidance that any unspent funds in an employee's health care account can be rolled over into the subsequent plan year. In addition, there are no restrictions on what type of health plan the accounts may be used and no cap on the amount employers can contribute to the account. The IRS also clarified important taxation and other regulatory issues.

 

Consumer driven plans are a move toward health and productivity management as employers and employees explore their individual needs and options.