Reprinted from Rescue Magazine January/February 2014
Now that the Affordable Care Act (aka “Obamacare”) is underway, many missions are looking for ways to comply with the act, but not bust their budgets. Some tools are available that might make sense to consider.
Consumer Driven Health Plans (CDHPs) are growing in popularity. Recently, a major health insurance carrier announced that its CDHP participation grew by 26% in 2012. Employers are moving to these plans in an effort to control rising healthcare costs. CDHPs are effective in controlling costs because they transfer more of the financial responsibility of healthcare to the employee.
CDHPs usually include High Deductible Health Plans offered with Health Reimbursement Accounts (HRA) or a Health Savings Account (HSA) designed to assist employees with the additional burden of higher out-of-pocket costs. These accounts, however, do not provide enough financial protection for employees who are inflicted with a serious illness such as stroke, cancer, or heart attack, or for someone who requires major surgery such as an organ transplant.
An excellent way to fill this financial gap is with voluntary benefits. Voluntary benefits, such as accident insurance, critical illness, and medical bridge insurance, are plans that can be offered at the workplace. These workplace offerings are more affordable than they are on the open market, and provide a financial safety net for employees who are sharing more of the cost of their medical care. These products, purchased, owned, and paid for by the employee, help employers increase the value of the benefits they provide without increasing their budgets.
Accident Insurance provides direct payments to a policyholder who suffers a covered accidental injury. These payments are based on a schedule of benefits included in the policy. Employees have a choice to purchase this coverage as stand-alone, or they can include a spouse and children.
Critical Illness Insurance provides a direct payment to the employee who is diagnosed with an illness that is covered under the policy. Illnesses that are customarily included are heart attack, stroke, renal failure, organ transplant, HIV, and cancer. These are lump sum payments, paid upon diagnosis, and can be used for any purpose.
Medical Bridge Insurance provides a direct payment for hospital confinement, preventive care, and
outpatient surgeries, services that would be subject to a deductible in a CDHP.
As employers move to CDHPs to save money, more and more employees are concerned with their exposure to out-of-pocket expenses. The employer can offset their concern by offering a portfolio of voluntary benefits. These benefits, usually paid through payroll deduction, are affordable and give employees peace of mind.