30 Second Insurance Tips©

Tip 245- The Value Of Choice

Most insurers allow even very small groups to offer more than one plan design.We just helped a small business set up new health coverage. We’re offering the seven employees two distinctly different plan designs.

Plan One is a traditional co-pay plan with a $4,000 deductible and then 80/20 coinsurance. There are office visit and pharmacy co-pays. Since most encounters with health care in a ‘normal’ situation happen at the doctor’s office or pharmacy, the co-pays provide great first dollar coverage. The out of pocket maximums however, are quite high; $6,850 for a single, $13,700 for a family.

Plan Two is a “qualified” (for HSA) High Deductible Health Plan (HDHP). It pays 100% after a single deductible of $2,000; $4,000 for a family. Yes, 100%!

Plan Two is about 28% more expensive than plan one.

Six employees are electing the less expensive co-pay plan. The seventh has a chronic health condition. So do both her children. The more expensive plan will greatly limit her annual out of pocket costs.

Do you think choice matters to this small group?