Health Insurance Daily

Group Clients and Dual Choice Plans

What techniques are many of our clients using to control health insurance costs today?

Almost all of our client planning meetings include some discussions about health insurance alternatives such as Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs). We anticipate that many of our clients will implement HSAs or HRAs over the next few years.

However, we still have many clients who just are not ready to make the “jump” to HSAs or HRAs. Many of these clients are implementing “dual choice” plans. The dual choice concept is really very simple.

In a dual choice plan, the employer establishes a “core” plan that may include an individual deductible of $1500, $2500, or $3000. This core plan, in most cases, still includes office visit copays, routine benefits, and a prescription card.

The second plan or “buy- up” option typically includes lower deductibles and out of pocket maximums. Individual deductibles of $250 or $500 are common in buy-up plans. Similar to the core plan, the buy-up plan has coverage for office visits, routine care and an Rx card.

Employees electing the buy-up option pay additional premiums and in return get an insurance plan with a lower deductible and maximum out of pocket amount. Employees who choose the core plan still have protection against large claims as well as help with the office visits and prescriptions.

From an employer’s perspective, they contribute the same amount of dollars regardless of what plan their employee chooses. Dual choice plans have been well received by both our employers and their employees.

posted by Mike @ 2:25 PM