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Why Companies choose High Deductible Health Plans
Lively · November 13, 2018 · 3 min read
Even this early in open enrollment, some clear trends are surfacing. HDHPs are on the rise. More and more employers are offerings these health plans.
What is causing this shift and why are companies embracing high deductible health plans? We will cover both the value and rationale for the movement to HDHPs.
HDHPs are Cheaper
HDHPs are cheaper for employers. Employers are always looking for ways to keep benefits stable and lower costs. This helps employers stay competitive in a robust job market and save money at the same time. So how much money are employers really savings? A recent study from Mercer showed larger employers are paying an average of $84 per month for HDHPs, compared to $132 a month for a traditional PPOs, per employee. As more employees more to HDHPs, the result is a 37% savings per employee. The larger the company the more total savings.
HDHPs are cheaper for employees. HDHPs offer lower premium costs than traditional plans like PPOs and HMO. How much less do they cost? That will vary by plan type, but we have seen nearly 40% savings premiums savings when comparing HDHPs to PPOs.
HDHPs are More Flexible
You now know that HDHPs save money. But what about your healthcare experience? In fact, HDHPs offer more flexibility when it comes to coverage options. Generally speaking, HDHPs offer fewer restrictions than HMOs, so you can go to the service provider you want. HDHPs help remove the red tape from your healthcare options.
They do however have higher out-of-pocket health cost. What (or should) you do about that? Read on to find out.
HDHPs Offer Extra-Saving Options
HDHPs are the only HSA-eligible health plan. With an HDHP, you can add an HSA (health savings account) to save even more. HSAs create:
Tax-free saving, investing and spending for healthcare costs.
Year over year healthcare funds. Your HSAs never expires. You own it and can take it with you from job to job and provider to provider.
An extra retirement account – After the age of 65, you can use your HSA funds just like a 401(k) or IRA.
Your HSA funds are yours for life. Each year you might select a new health plan, but not a new HSA. It’s nice to have that stability in an ever-changing healthcare market.
High Deductible Health Plan FAQs
HDHPs are Now the Normal
No one wants to lead the pack when it comes to changing benefits options. Employers fear backlash and a drop in employee satisfaction. We have good news. More than 9 in 10 employers expect to offer high-deductible plans in 2019.
Fact: HSA-Eligible Health Plans Now As Common as PPOs and HMOs
Adding an HDHP is no longer the bleeding edge, it is expected. HDHPs are cheaper for employers and employees. Based on healthcare costs, we only expect this trend to continue. More employees will adopt an HDHP this year than last year, will you be one of them?
Benefits
2024 and 2025 HSA Maximum Contribution Limits
Lively · May 9, 2024 · 3 min read
On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.
Benefits
What is the Difference Between a Flexible Spending Account and a Health Savings Account?
Lauren Hargrave · February 9, 2024 · 12 min read
A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.
Health Savings Accounts
Ways Health Savings Account Matching Benefits Employers
Lauren Hargrave · October 13, 2023 · 7 min read
Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.
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