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Health Savings Accounts
Don't Use the ER as Your PCP's Office
Employee Education/Benefit Meetings

Health Savings Accounts

In our newsletters, we have discussed the recent enhancements to Health Savings Accounts (H$A) as further reasons why employers should re-visit this approach. Admittedly, the establishment and implementation can appear daunting to many employers, but here at Stratford we assure you that if the financial aspect makes sense, it presents a wonderful opportunity to engage, communicate and educate your workforce on H$A's, as well as your entire benefits package. Why? Because based on several recent studies, there are very compelling business reasons for an employer to offer a wide array of benefits (both employer paid and totally voluntary), present them in multiple mediums and on a regular basis.

For many employers, healthcare costs are the number one concern. Additionally, many employers have reported that that expense is an impediment to hiring employees and growing their businesses. Hence the paradox that afflicts many employers today; offer benefits to attract and retain quality employees, but the cost of those benefits may be prohibitive to profitably running the business.

With the significant premium reduction available with H$A's, savings can be redirected to the bottom-line as well as invested in your employees (in the form of contributions to the H$A's and additional low cost, "high value" ancillary benefits).

Where does your benefits program fit in the successful operation of your business? Where do you rank relative to your peer group? How do you know if your employees understand the value of the benefits offered and to what degree are they appreciated?
Consider your answers to these questions in light of metrics uncovered in the MetLife Benefits Benchmarking studies of 2004-2006:

57% of Employees Spent under 30 minutes Making Benefits Decisions at Open Enrollment
Over 50% of Employers Rank 'Retaining Employees' as the Most Important Benefits Objective, but just 15% consider 'Helping Employees Make Better Benefits Decisions' as Most Important.
Only 30% of All Surveyed Employees strongly agreed that 'My Company's Benefits Communication Effectively Educate Me' (drops to 16% for groups with 2 to 49 lives)
39% of All Surveyed Employees strongly agreed that they were 'Satisfied with the Benefits I Receive Through My Employer' (drops to 29% for groups with 2 to 49 lives)

Yes, I am indeed suggesting a strong correlation between time spent by the employer (and their broker) communicating its benefits package and the level of employee satisfaction and appreciation. There are a multitude of methods you can use to get significantly more value (i.e. more for less) from your benefits program, and we'll explore that further in other articles. If you need to know now, call us!

If you are experiencing chest pain, go straight to the ER.
If you are hit by a car or experiencing a serious allergic reaction, go straight to the ER.

Going to an emergency room instead of scheduling a doctor's appointment has become a trend in this country. In recent years, a whopping fifty-five percent of the 90 million visits to emergency rooms were unnecessary. Translated into dollars and cents that means 40.5 million people paid up to three times as much for routine care as they would have paid at a physician's office.

The problem is rooted in the "nobody knows nothing" syndrome. According to Great West Healthcare's survey, 3 out of 4 people think the "health insurance companies" are responsible for controlling health care cost. ONLY 1 out of 4 think "individuals" are responsible. Another eye popping statistic is that 79% of us have no idea what our medical care cost before we are treated. If you knew the average ER charge was $500 (in 2005) and the average doctor visit was $139 (in 2005), which one would choose? What if I told you that you had to pay the $500? Would you go to the ER or go to your PCP? In today’s health insurance arena, we are all paying for it through our ever-escalating premiums. Healthcare costs are climbing at more than 16% a year. In the ideal word, we would all know we are individually responsible for controlling healthcare cost. We can contain cost with 2% to 3% annual increases if we become better consumers. The following steps can help you get the health care you need without paying outrageous premiums and unnecessary ER charges:

Get a primary care physician. Having a regular doctor who keeps your medical history on file and who is available to see you in a pinch is one of your best recourses in an emergency. A good primary care doctor is available 24 hours a day for emergencies or takes turns handling off-hour urgent calls with colleagues. You should know the covering doctors before you need them.

Find out what other health care facilities are available in your community. 24-hour walk-in clinics and minor emergency centers can care for non-urgent conditions faster and cheaper than a hospital ER.

Insurance Coverage. Make sure you know which emergency services are covered and what instructions you need to follow in urgent situations. For example, if you go to an ER with an ear infection, your health insurance may not cover the cost. Also, some plans require that you notify them within a few hours of being admitted. If you don't, your treatment may not be covered.

Let's all work harder to avoid unnecessary ER visits and become better consumers and I guarantee we will all pay less for our health insurance.

How important are employee Education/Benefit Meetings? We feel Employee Education/Benefit Meetings are paramount to the success of the implementation of a benefits program. By taking the initiative and having meetings that explain the change and the reason for the change it helps eliminate any negativity and help build employee morale with respect to the benefits program.

Much of the information in this issue of The Stratford Financial Group newsletter deals with the notion of "Consumer Directed Healthcare", specifically HSA and HRA. While these plans continue to gain more momentum, we need to be sure as Benefit Consultants and business owners that we are educating our employees so that they can utilize their medical insurance to obtain quality care in a cost-efficient way. Not less care, but different care.

To illustrate my point, I'd like to share a story with you. Earlier in the year a long time client decided to implement a cost sharing plan which would allow them to significantly reduce the employer and employee premium costs. The main difference was in the prescription portion of the plan. All of the prescription co-pays were increased, but the savings the employees would see in their contributions would make up for the difference they would pay at the pharmacy. My client did not see the need for the meeting since the employees were very busy in production and they felt that the department managers would be able to pass along all of the information the employees would need.

Well, not too long after the plan was implemented I began receiving phone calls from one particular employee who told me that the plan wasn't paying for her prescription. The situation was that her prescription under the old plan cost her $25, and under the new plan it was $50. It was a shock to her and it was worse that she had to find out at the pharmacy that she would now pay $50. The drug she needed was a brand name for which there is a generic equivalent. I suggested she check with her doctor, who switched her prescription to the generic allowing her to pay only $10 at the pharmacy! So to recap, she is now saving close to $10 per week in contributions, she is saving $15 per prescription, and she is a happy and motivated employee. The only negative is that she was upset for a short period of time which could have been eliminated altogether had we arranged an employee meeting.

I encourage you to make sure to educate your employees regarding these new programs, after all, happy employees are productive employees.