Many employers are switching or may be thinking about switching employee health plans to the consumer driven health plan which decreases expenses of presenting health benefits. The appeal to consumer driven health plans is smaller premiums. However, it is still important to list the pro’s and con’s between the expenditures and advantages of the CDHP and conventional health insurance programs.
If you’re an employer who purchases NY Health Insurance or NJ Health Insurance and in the Manhattan, Queens, Brooklyn, Bronx, Staten Island, Westchester, Hudson County, or Union County areas, listen up!
Since March of 1999, the cost of employee health insurance for employers has increased from $1.03 per hour worked to $2.00 per hour worked in March 2009. A one dollar per hour worked for each employee is a substantial amount the employer has to pay. That’s close to a 2% increase of total compensation!
Employers are not the only ones paying more for their employee’s health insurance, the employees themselves have a price to pay as well. The National Compensation Survey have affirmed that the common medical plan monthly fixed rate premium private industry employees with a single and family plan pay, has risen from approximately $68-single coverage and $265-family coverage in 2004 to $92-single coverage and $350-family coverage in 2009. Although both the employer and employee have an increased health insurance cost, the relative amount of cost has proven to be similar from 2003 to 2009. The employer was responsible for 82% of the premium for single coverage and the employee share was 18% in 2003. The employer was responsible for 80% of single coverage, whereas the employee paid 20%. Family coverage for both 2003 and 2009 were 70%-employer and 30% employee.
How can employers and employees reduce their costs? Which plan is most reasonable? Even though coverage rates have been stable in the past few years, employers have eliminated health insurance benefits, employees choose not to participate in the health plan, and when employers closed down as a result of the recession, the employees’ plans were lost. Many employees and their families have no coverage and are in a state of financial jeopardy. The Bureau of Labor Statistics suggests options for employers and employees to help reduce costs: Consumer driven health plans (CDHP), High deductible health plans (HDHP), Health savings accounts (HSA), Archer medical savings accounts (MSA) vs. HSA, Health reimbursement arrangements (HRA) vs HSA, and Flexible spending accounts (FSA) vs. HRA.