Health Benefits Plans for Employers
The Old Way: Defined Benefit Health Plan
Every year 2 million fewer U.S. jobs provide group health benefits.
For many employers, it is only a question of time before they are
forced to terminate their group health benefits plan or go out of business.
- Employees receive a defined healthcare benefit—doctor visits, hospitalizations, pharmacy, and so on—at uncertain cost
- Average Cost in 2006: $14,000/family, $4,500/individual
- 20%+ annual rate increases limit your ability to grow
- Full-time HR people (or owner) required to administer the plan
- Few incentives to reward healthy choices or wise spending
- No protection for employees who quit or are fired
The New Way: Defined Contribution Health Plan (HRA)
- Employees receive a fixed monthly tax-free contribution ($100-$400/month) to purchase their own individual/family health insurance
- Individual plans offer 80%-90% of employees better, safer coverage for 1/3 to 1/2 the price of typical employer group plans
- Average Cost in 2006: $6,492/family, $2,076/individual
- No annual cost increases except those you control
- Easy-do-administer HRA programs let each employee choose his/her benefits
- Employees with preexisting medical conditions get permanent, state-guaranteed coverage
- HSA & HRA program options let employees save for their future
- Consumer Incentives reward healthy choices and wise medical spending (e.g. generics, weight loss)
- Ex-employees keep coverage for as long as they choose to pay the premium