The signs of the season are all around us – houses are lit up, the radio is playing holiday music, and healthcare providers are imploring us to use our group benefits before year-end.
“Use your benefits here!”
“Get massages before your benefits expire!”
“It’s your money. Make sure you get all you’re entitled to!”
Messages like these make it seem like plan members must max out their coverage in order to squeeze every last cent from their compensation. But that’s actually a terrible way of looking at group benefits. Just take a look at our previous article where a team member paid way too much for his massages.
Insurance companies get paid.
You get a lump of coal.
Insurance companies price insured health and dental premiums so they can make a profit. And they’re smart cookies. The math whizzes at insurance companies have a pretty good idea of just how much the average plan member will cost. They’ll price the plan accordingly (and often even a little too low to get the sale).
What happens when plan member claims are higher than what the insurance company is collecting? The insurance company quickly realizes it’s not sustainable to pay all those claims. So, they hike their premiums for the next year. This can hit plan sponsors hard in the pocketbook. Plan sponsors may decide to cut back benefits, increase deductibles, make plan members pay a portion of the premiums, or even cancel the benefits plan altogether!
Before you think we’re being grinchy, rest assured, we believe that everyone should have health and dental coverage! What we disagree with is paying insurance premiums while seeing plan members encouraged to squeeze in extra massages or pairs of glasses just because they can. It can leave plan sponsors feeling helpless like their tongue is frozen to a pole.
All I want for Christmas is cost control
Ready to stop worrying about whether your benefit plan is being used (or abused)? Set up a Health Spending Account instead of insured health and dental coverage!
With our HSA Classic there’s no “use-it-or-lose-it” mentality. Plan members have access to every dollar contributed until they use up their funds. Or you can set up an HSA Rollback and let the funds reset after a benefit period. Even if plan members use all their funds, the plan sponsor still has the final say over what they contribute next year. Costs controlled!
Don’t wait until you’re visited by the ghosts of benefits past, present, and future to turn your plan around. Just get in touch with our Growth Team!
