Pub. 3 Issue 4

29 SPRING 2016 I n this “Ask Alison” edition, I will address the rising cost of health insurance premiums. Take a look at the follow- ing renewal scenario and consider whether developing a long term strategy is an option or necessity. Q: Can your dealership afford these increases? A: After 5 renewals your annual cost increase is $266,462.00. Q: Can your employees afford these increases? A: Using the same calculation above, a single employee premium would increase from $370 (estimated current premium) per month to $507 per month. Q: What does research show regarding healthcare consumption? A: Research has shown that less than 20% of members consume more than 60% of healthcare dollars. A traditional employee benefit approach has focused on the 20%. Q: Is there a solution? A: Consider focusing on the needs and best interests of the 80%, while still providing quality healthcare to meet the needs of the 20%. Change the context and perspective of evaluating plan choices and benefit designs. Considering multiple plan options and funding options is one way of doing this. With innovative funding options on an HSA (Health Savings Account) HMO it is possible to turn a high deductible plan into a no deductible plan. Q: Howwould this benefit my dealership andmy employees? A: Adding this option gives your employees another plan choice with premiums that could be up to 20% less than those of a traditional HMO plan. One dealer client’s HSA premiums were 26.22% less than their traditional HMO plan. These savings can be used to fund the HSA (Health Savings Account) to help employees pay for future healthcare expenses. This is especially true for the young and healthy members of your organization, those that don’t use their health plan on a regular basis or those that use the plan for mostly preventive care services. Additionally, unlike an FSA (Flexible Spending Account) the tax deductible money in the HSA bank account rolls over, (no use it or lose it) the employee owns the account so it’s transferable and can be used for future health care expense, including dental, vision and long term care. Over multiple years, this can mean substantial savings for both your dealership and your employees. Benefit Compass Insurance Services offers solutions. Consumer driven healthcare means getting the consumer to drive the process by understanding that taking control is the best way to get the healthcare they need at the best possible cost. We call it “Financial Planning for HealthCare”.  “Ask Alison” is a regular feature to our quarterly newsletter. Alison McCallum has been in the employee benefits industry for over 20 years. She is an owner/ founder of Benefit Compass Insurance Services and works with a number of dealers in Southern California. GLANCDAmembers have free access to Benefit Compass Insurance Services’ compliance resources, consultation and bulletins. If you have questions about the possibility of lowering your healthcare costs please feel free to contact me at (949)289-9073 or amccallum@benefitcompass.com with questions. I look forward to answering your specific questions. Ask Alison 2015 Medical Insurance Premium: $720,000/year 2016 at a 6.5% renewal increase: $766,800 2017 at a 6.5% renewal increase: $816,642 2018 at a 6.5% renewal increase: $869,724 2019 at a 6.5% renewal increase: $926,256 2020 at a 6.5% renewal increase: $986,463 (Estimated premiums using a 100 employee group with dependents)