Take control of health care costs: Explore consumer-directed plans

 

As school districts continue to search for methods to preserve classroom funds and reduce health insurance expenses, many are looking at the benefits of Consumer Directed Health Care. The concept is that when employees are made aware of the actual cost of services and have a financial interest in reducing their health care expenses, they are motivated to make wiser choices.
One of the most effective and cost-efficient methods of involving employees in their health care decisions is through implementing a High-Deductible Health Plan (HDHP) with a Health Savings Account (HSA). Here’s how it works:

• A district purchases an HDHP and combines it with an HSA.
• Contributions are deposited into the HSA by the employee, employer or both.
• The money in the HSA belongs to the employee and is tax free. Any money left in the HSA can be used to pay for future medical expenses. 

Employee contributions
Combining an HDHP with an HSA is ideal for districts that require their employees to pay a portion of their premium. Because many districts have insurance contribution caps, employees pay hundreds of dollars per month toward their health insurance premiums. HSAs enable school districts to pay the entire insurance premium. Funds employees would have paid in premium can be contributed to their HSA deductible expenses. Consider the example below:

Category	Common Insurance	HSA Type Plan $2,400 High-Deductible Plan
Monthly family premium Capped at $1,200	$1,400	$1,000
Employee contribution	$200/month ($2,400/year) Required to insurance company	$200/month ($2,400/year) Voluntary to employee HSA
Amount available to employee if no claims are filed	$0 available to the employee	$2,400
Amount available to employee with $2,400 in medical expenses for the year	$0 available to the employee	$0 available to the employee
Savings	To district: $0 To employee: $0	To district: $2,400/year To employee: Up to $2,400

 

Available carriers
SET Employee Benefits offers HSA plans through Blue Cross Blue Shield of Michigan, Priority Health and HealthPlus. 

Learn more
To view a video on HSAs, click here. Or visit www.setseg.org. Select “Podcasts/Videos” from the top menu.