A health insurance carrier increased the premium it charged one of my non-profit clients—by a lot. (That seems to happen way too often…so aggravating!)
My client had a real dilemma. To avoid passing the higher premium on to employees, they’d have to increase co-pays and add a deductible for some benefits.
The client was concerned, rightfully, that higher co-pays and deductibles could make healthcare hard to afford for their people. This non-profit cares deeply about its employees, and did not want them to lose sleep over their health costs.
So they asked me if there was anything I could do.
I recommended a Health Reimbursement Arrangement (HRA) to help employees cover the costs of the new co-pay and deductible. An HRA allows an employer to reimburse employees for certain medical costs, when incurred, up to a specified dollar amount established by the employer. These funds are non-taxable to the employee and are considered allowable deductions for the employer.
The non-profit took my suggestion and adopted an HRA plan. And within two weeks, it paid off.
An employee had a severe problem that landed her in the emergency room. The hospital billed the carrier, and the carrier billed the employee—for a $500 co-pay. (That kind of bill could give some people heart palpitations—and send them back to the ER!)
But with the HRA plan, the employee simply sent the bill to the non-profit’s plan administrator, and she was reimbursed for the $500 co-pay within three days.
The employee was very grateful, and thanked the non-profit’s benefits manager for looking out for her. She let her co-workers know, too. The benefits manager told me that, after the story got around, office morale was upbeat.
Encouraged by this positive response, the non-profit added another helpful option to its health plan: Tele-Medicine. This program lets employees get medical advice through phone and/or video conferencing. For routine care, that saves time (by eliminating the doctor’s waiting room) and money (since there’s no co-pay with Tele-Medicine).
So “hip-hip-hooray” for the caring—and forward thinking—of this small employer!