High Deductible Health Plans
A High Deductible Health Plan (or HDHP) is a comprehensive health insurance policy with moderate to high deductibles ($1,200 to $5,000) and annual out of pocket maximums ($2,400 to $10,000). It also is part of the consumer driven health care push. HDHPs do not offer first dollar benefits or copayments for physician office visits, emergency room visits, or for prescriptions at the pharmacy. Since HDHPs have less rich benefits than traditional PPO plans, HDHPs can reduce your premiums by up to 30%!
Employers often choose to contribute to their employees' accounts. This is a great way to offer a generous employee benefit, while turning a portion of your variable costs into fixed costs. For example, many of our customers (employers) contribute 50% of the employees' monthly medical premiums. When they convert to a HDHP with a Health Savings Account, they invest a portion of their premium savings as a monthly contribution to each employee's HSA. The employer contribution can remain the same each year, and unlike medical premiums, is not subject to medical inflation. Hence, a portion of the employees' compensation becomes a fixed cost in the annual business budget.