Knox Associates sees CDH as the way forward for Nevada Employers who are looking to gain control over their rising health care costs.
While CDH is not new, rising cost of traditional HMO based products are forcing Nevada employers to look at alternative methods of providing health insurance to their Nevada employees. CDH employs two main methods of providing employee benefits:
1) Health Reimbursement Arrangement (HRA) - An HRA can be offered in conjunction with a high-deductible health PPO plan (HDHP), and is funded by the employer for each participating employee. It pays for eligible health care expenses typically covered under the medical plan. Unused funds can be carried over to the next year to cover future health care expenses, an incentive to employees to use their personal HRA wisely. If funds are exhausted, the employee is responsible for satisfying the remaining deductible before the plan begins to pay. If the employee changes jobs, the money stays with the employer.
2) Health Savings Accounts (HSA) - An HSA is offered in conjunction with a HDHP PPO plan and is a funding mechanism in which the participant pays for health costs through a fully insured, tax-exempt savings account. Employees or employers or both fund the account. An HSA is subject to regulations mandated by the federal government that limit coverage to IRS section 213(d) medical coverage. All unused amounts carry over indefinitely during a participant's lifetime. If the employee changes jobs, the money stays with the employee.
Nationally, typical PPO, HMO and POS rate increases are averaging between 8% and 12% while CDH products are averaging between 5% and 7%. "This is a long term approach toward gaining control of health care rate increases," explained Rick Knox, Vice President of Knox Associates "I have seen rate increases for the more popular Las Vegas HMO/POS plans that exceed 20 percent - these increases are not sustainable and the employers are shedding more and more of the premium increases onto their employees. This just increases the problem of uninsured individuals here in Nevada. With the increased employee contributions, employees are waiving out of group coverage and opting to go with out health insurance. This creates a two-fold problem; 1) Employers are finding it harder to keep their group plans in compliance with participation rules, and 2) Employees who do not have health insurance are proven to be absent from work for longer periods of time during illnesses - causing disruption in the workplace." explained Knox.
Is there a solution? "I think so, Anthem Blue Cross has launched a new group health plan designed specifically for the Nevada small group (2-50 employees) market place. With this new plan we are able to offer the employer an affordable way to cover their employees. With employer contributions as low as $125 per month, the employee can choose between 12 different health plans. This gives the employee the option to select a plan that best fits his/her budget and healthcare needs. We have installed several groups since the new Anthem EmployeeElect product was launched on the 1st of March. The interesting aspect of the case studies is how employee participation is leaping with average participation equaling 95% of eligible employees." explained Knox.
For more information on Consumer Driven Healthcare for Nevada employers go to www.KnoxAssociates.net or call 702.656.5915 and speak to the Group Sales Department of Knox Associates, LLC.
Knox Associates is a Las Vegas based insurance brokerage specializing in providing Health, Life and Disability Insurance to Nevada Businesses and the Self-Employed. Knox Associates, established in 2003, is a dedicated team committed to providing personalized, five-star service.