Read On To Learn The Lowdown on High Deductible Plans
For California employers that want to offer robust health insurance benefits to their employees while keeping costs down (which essentially means almost every employer), high-deductible group health insurance plans provide an attractive option. The features of these popular plans create a solid balance between costs and benefits. They can help employers and employees alike stay healthy and productive while minimizing the monthly financial strain on each side.
What Does a High Deductible Mean?
To understand the advantages of high-deductible group health insurance plans, employers should understand what a deductible is and what obligations they have, if any, regarding them. A group health plan’s deductible is the amount each employee must pay for their healthcare services services before the insurance company starts to pay for the cost of their care. For example, if the deductible for a group policy is $3,000 and an employee needs a procedure that costs $10,000, the employee will need to pay $3,000 if they have not otherwise paid for care that counts towards their deductible. A Kaiser Family Foundation 2022 Employer Health Benefits Survey found that the average deductible for high-deductible group health insurance plans in 2022 was $2,925 for individuals and $6,013 for family coverage.
Unlike the contributions they may make towards premium payments, employers have no obligation to contribute towards an employee’s deductible, no matter how high or low it may be. Those payments fall squarely on each employee.
Even though a high-deductible itself may not impact a business’s bottom line, a high-deductible group health insurance plan offers many upsides for employers. Here are five advantages of these plans that California employers should consider when looking at coverage options for their workforce.
Related: Why Mental Health Benefits Matter to Employees
Lower Premium Costs For Employers and Employees
As noted, most employers pay part of the monthly premiums for a group health insurance policy while each employee pays a proportionate share of the remainder. One of the most prominent features of a high-deductible plan is that they typically come with lower premiums. In exchange for the employee paying more for their care when needed, insurers are happy to accept lower payments when they don’t. This results in direct savings for the employer and each employee, who will see a smaller amount taken out of their monthly paychecks.
Health Savings Accounts (HSAs)
High-deductible health plans frequently offer employees the option of opening a Health Savings Account (HSA). An HSA allows participating employees to set aside pre-tax dollars to cover qualified medical expenses, such as doctor visits, lab tests, prescriptions, dental and vision care, and more.
In addition to an HSA’s tax advantages for employees, many employers choose to contribute to their employees’ HSAs. This can further incentivize employees to enroll in the plan. Additionally, employees appreciate that HSAs are portable, meaning they can take their HSA funds with them to a new job. The security and certainty this provides can enhance employee job satisfaction and retention.
More Preventative Care Means More Productive Employees
Most high-deductible group health insurance plans exclude preventative health services from the deductible, meaning that the insurance company will cover most or all of the costs of check-ups, screenings, and vaccinations without the employee having to meet the deductible. Since such services are low or no-cost, employees are more likely to take advantage of them.
Preventative care – and the early detection of serious diseases or conditions that often result – means that health issues can be treated before they worsen. Additionally, preventative care can keep employees healthier generally, thus reducing the number of sick days and lost productivity caused by common illnesses like a cold or the flu. Employers can support a healthier workforce and reduce long-term healthcare costs by emphasizing preventive care.
Related: How Can I Reimburse My Employees for Healthcare in California?
High-Deductible Group Health Insurance Plans Offer Flexibility and Customization
Employers can tailor their high-deductible group health plan to meet their needs and budgets. Features that are often customizable in these plans include multiple tiers of coverage, different network sizes, and varying deductible levels. This customization ability allows employers to balance cost savings and offer competitive benefits packages to attract and retain top employees.
Better Cost Control
High-deductible group health insurance plans often offer more transparency into employee health care expenses and utilization patterns. This can provide employers with the ability to implement targeted cost-control strategies. Employers can work with their group health insurance broker to negotiate better rates and lower premiums, implement wellness programs, or introduce telemedicine options, all of which can lead to cost savings and improved employee health.
Contact Preferred Insurance Today To Learn Whether a High-Deductible Group Health Insurance Plan Is Right For Your Business
Helping small businesses in California navigate the complicated landscape of the Affordable Care Act and health insurance coverage is what Preferred Insurance does every day. As an experienced California individual and group health insurance broker, we will answer your questions and provide practical, affordable coverage options tailored to your business needs.
Schedule your free consultation with one of our experienced group health insurance brokers today.