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Hit Hard by an Employer’s High Deductible Health Plan?

Hit Hard by an Employer’s High Deductible Health Plan?

Posted Jul 07, 2017 by Jenifer Dorsey

Adding This Insurance Product to Your Employee Benefits Could Help

High-deductible health plans (HDHPs) may be commonplace these days, but it would seem their popularity continues to trend upward as do their general deductible amounts. This reality not only impacts those with individual health plans, it also affects those with job-based coverage.

While single employee health insurance premiums have not increased at a statistically significant pace in recent years, plan deductibles have, according to The Henry J. Kaiser Family Foundation’s 2016 Employer Health Benefits Survey.[1] The average single deductible amount has increased from $991 to $1,478 over the last five years.[2] Furthermore, the survey showed that after meeting their general annual deductible, 64 percent of covered workers have coinsurance and 14 percent have a copayment for hospital admissions.

Over a similar timespan, the percentage of unpaid hospital bills also increased, according to a new report released during the Healthcare Financial Management Association’s Annual National Institute. Nearly 70 percent of patients with hospital bills of $500 or less didn’t pay off the full balance in 2016 compared with 53 percent in 2015.[3]

These separate report findings do not necessarily correlate; however, they do seem to indicate that consumers: A.) face higher cost-sharing and B.) lack the funds to compensate for this increase. It can be a tough time for employers and employees alike. Employers want to provide affordable benefits that can help them attract and retain the right personnel, and employees want manageable monthly premiums.

Fortunately, there are ways employers can achieve this balance and help relieve employees’ growing responsibility for out-of-pocket healthcare expenses. One such product is known as a group gap plan.

What is a group gap plan?

A group gap plan such as Link, a product available from IHC Specialty Benefits, is a type of supplemental coverage. It is neither intended to replace major medical insurance, nor is it ACA-compliant. However, group gap plans can work in tandem with job-based health insurance to help lower employees’ unexpected out-of-pocket medical expenses.

The group gap benefits available to employees supplement their major medical deductible, coinsurance and copayment amounts. Specific plan provisions, limitations and exclusions will vary by policy; however, here is an example to illustrate how a group gap plan such as Link works:

Florist Gump, a local flower shop, has four full-time employees and had to switch to a high-deductible plan in order to keep their monthly premiums low. The owner, Sally, decided to offer an optional Link Group Gap plan as well.

  • One employee, Joel, fractures a hip and accrues $15,000 of covered inpatient expenses.
  • Florist Gump’s group major medical plan has a $3,500 deductible and 80 percent coinsurance once the deductible has been met.
  • They also offer the Link 100 plan, which has $3,500 inpatient and $2,800 outpatient maximum benefit. It has a $0 deductible and 100 percent coinsurance.
  • Joel pays:
    • ​$3,500 using his Link 100 plan inpatient benefit; this fulfills his major medical plan deductible
    • $2,300 out of pocket toward the remaining expenses; this is his coinsurance responsibility (20 percent) and his major medical pays 80 percent coinsurance      
  • Since Joel has met his deductible, his major medical insurance plan’s 80 percent coinsurance kicks in and pays the remaining $9,200 to his medical providers

Does buying more coverage really help people save money?

It can. Ultimately, individuals and families will need to weigh their overall healthcare budget, including what they can afford to pay in monthly plan premiums and pay toward annual out-of-pocket expenses. They will then need to consider how they will cover any unexpected medical bills and if a supplemental product such as Link can help.

How can you get a group gap plan?

Ask your employer or your company’s benefits adviser if they offer products such as Link group gap plans. If not, ask them if they might consider doing so. You may also consider purchasing an individual gap product such as Metal Gap or Metal Gap 2 through a website such as healthedeals.com.

 

 

 


Legal Disclaimers

[1] The Henry J. Kaiser Family Foundation. “2016 Employer Health Benefits Survey: Summary of Findings.” Sept. 14, 2016. http://www.kff.org/report-section/ehbs-2016-summary-of-findings/

[2] Ibid.

[3] MacDonald, Ilene. “Study: 2 in 3 Patients Don’t Pay Their Hospital Bills in Full.” FierceHealthcare. June 26, 2017. http://www.fiercehealthcare.com/finance/study-2-3-patients-don-t-pay-their-hospital-bills-full