May 19th, 2020
Employers of all sizes struggle with the high and ever-rising cost to provide healthcare and prescription drug benefits to their employees. We are seeing many employers forgoing group healthcare plans altogether, opting instead to provide a stipend to the employees to purchase their own care. As an employer, providing a benefit such as healthcare is completely necessary to attract and maintain good employees. However, without question, any business owner would welcome a conversation on how to reduce its bottom line.
Age-related risk is a major factor increasing a group’s overall cost? Given that Medicare-eligible employees have an adverse effect on the group’s overall cost and benefits, what options does an employer have? Employer laws have strict guidelines on employee rights and do not
allow a certain demographic within a group to be discriminated against or omitted from the group plan. An employer cannot entice an employee to leave the group plan and they cannot offer a lesser benefit plan to those group members who are a burden on the overall cost.
You Don't Need a Background in Group Benefits
What employers can do is offer alternatives to the group plan for Medicare-eligible employees and allow those employees to decide for themselves what plan they want. If under the employer group plan, there is a cost-share to the employee, maybe other options for the employee are better for them. It is a good idea for employees to review all available options at the time of Medicare eligibility, so they can make the best choice for themselves.
It is a given that a group Medicare product is not as competitive as an individual Medicare product, but there are other important factors to consider. If the employee turning 65 has a HAS account, they will no longer be able to make contributions to it. This is just another reason the employee and the employer should look for alternatives. Let me present a new and unique solution, a group MSA Medicare Advantage High Deductible Health Plan.
Here is How the Plan Works for the Employee
The plan by law has a $0 premium for the employee. That’s right, the employee will never have a premium for their coverage. Also, by law, the plan deposits funds from Medicare into the employees’ MSA account annually (funds are not “use it or lose it” and will grow uncapped with time). Maybe the most important aspect to consider, the plan by law has no network restrictions and the employee can seek care from any Medicare-participating provider in the US who is accepting new patients. Last, but not least, the plan by law does not provide prescription drug coverage, but the employee can purchase their own customized drug plan to enhance their coverage.
Here is How the Plan Works for the Employer
allows the employer to choose a set benefit design or create their own, for its Medicare-eligible employees based on how much of a group fee they want to pay per member/per month. Depending on how much the employer contributes as a group fee will determine how much deductible and deposit the employee will have, the higher the fee the higher the deposit and lower deductible. There are several benefits to this; first, they can provide a unique healthcare plan with no premium to the employee. They can reduce their overall group cost by carving out the Medicare-eligible from the overall group. They can now contribute a group fee that makes sense for the company’s bottom line saving money and enhancing the benefits for everyone in the group.
This is a WIN-WIN-WIN for everyone involved
The High Deductible Group MSA Plan is a new concept and the timing couldn’t be better given the circumstances around COVID-19. There are many business owners struggling financially as a result of this virus. Now would be a good time to get in front of them, who knows, you just might help save someone’s job or business.
If you are a group insurance or Medicare advisor and would like to know more details about this program, I encourage you to reach out to me. Agents interested in this product should know, although this is a Medicare product, you are not required to be AHIP certified to sell it. Also, this product is available now, you do not have to wait for an Open Enrollment Period.
Be Kind, Make a difference!
Sean from the Field