Tips for YMCAs on Selecting a High Deductible Health Plan (HDHP)

FAQs
Tips for implementing an HDHP
Glossary

FAQs
What is a High Deductible Health Plan?
A High Deductible Health Plan (HDHP) takes many forms. All are designed to make employees more aware of and responsible for the cost consequences of their healthcare choices. HDHPs are characterized by a higher deductible than traditional health insurance, as well as by lower premiums.

What are the general features of an HDHP?
For 2010, an HDHP must have a minimum annual deductible of $1,200 for individual coverage and $2,400 for family coverage (the deductible amount is indexed every year). With the exception of preventive care, the annual deductible must be met before the plan benefits are paid.

Service delivery in the HDHP plan may be offered with a:

Preferred Provider Organization (PPO),
Health Maintenance Organization (HMO), or
Point of Service (POS)

With an HDHP, will I be able to use an out-of-network provider?
Depending on the HDHP your organization elects, employees may have the choice of using either in-network or out-of-network providers. Using in-network providers will save employees money.

Are HDHPs a popular choice?
A periodic census of U.S. health insurance carriers by America’s Health Insurance Plans (AHIP) shows that the number of people covered by health savings accounts / high deductible health plans (HSA / HDHP) totaled 8 million in January 2009.

Why combine a Health Savings Account with an HDHP?
Combining a Health Savings Account (HSA) with any qualified High Deductible Health Plan allows employees to make tax-deductible contributions, pay medical expenses with pre-tax dollars, and earn interest tax free. The HSA account is similar to an IRA, except that employee may use tax free savings for qualified medical expenses which their health plan does not cover. These expenses include deductibles or other alternative medicine costs. If an employee doesn’t use the funds, they will continue to accumulate with interest year after year. These funds may even be used for qualified health expenses in retirement.

What are the keys to choosing a health plan for employees?
There are three key dimensions which will drive your decision:

Service Area
- Not all plans are offered everywhere
- Most plans are offered in limited geographic locations
Network
- Which physicians participate in the network?
- How do the networks compare between your existing plan and a new plan?
Plan Design
- This may depend heavily on whether you are considering a “total replacement” of your existing plan(s)

Can an insurance broker help my YMCA?
Many YMCAs rely on a broker to identify insurance carriers and negotiate plan design. Their commissions typically average 4% of annual premiums. Here’s what a broker typically does:

Performs a comparative analysis of alternative health plans based on your current offerings
Educates your employees about their plan options
Assists in claims processing

Tips for implementing an HDHP

Undertake Strategic Research
- Determine what benefit features are important to your organization and workforce.
- Know local employment market data. Where are you recruiting from? What plans do other companies offer as they compete with you to hire staff?
- Determine what your cost savings expectations are.
- Evaluate whether or not you will contribute to the HSA on behalf of your employees.
Gather Accurate Data
- Compile a census of your employees, including: names, gender, date of birth, current coverage type.
- Poll employees to establish their level of interest in a new plan. The poll can include physician information which can be used to compare networks.
Find an Insurance Carrier
- Your state’s insurance department can be a good source for obtaining contact information on health insurance company plan offerings in your state.
- Make sure you are comparing apples to apples. Know what your current contract says. Complex language in contracts may make plans appear similar when they are not.
- The National YMCA Employee Benefits Plan (NYEBP) offers an HDHP as one of their health benefit options. For information, call 1-800-USA-YMCA and ask for the Benefits Plan.
- Nationally, the four largest providers of HDHPs are:
Understand Plan Designs and Premiums
- When you narrow down the companies there are five features you want to look at:
  - Deductibles
  - Co-insurance rates
  - Preventive care
  - Prescription co-pays
  - Network comparability
- Network comparability will be a huge concern for your employees. The higher the comparability rate, the less anxiety. In other words, will they need to switch physicians?
- Use a chart to list the features of each plan side by side.
- Establish if there are cost-containment methods which your organization can implement.
Educate Employees about the Plans
- Give employees explanation of the plan they currently have and the new plan.
- Use actual case scenarios.
- Give yourself enough time to implement changes.
- Your insurance representative or broker should be a resource during this phase of implementation.

Glossary
Co-insurance The split defined in a health-insurance policy that divides costs between the insured and the health-insurance company, usually after a deductible is met, and prior to an out-of-pocket maximum being met (e.g., 80 percent insurance company, 20 percent insured).

Co-payment A flat fee paid for a medical service, such as a visit to a physician or a supply of a prescribed drug, after which the insurance company pays the rest of the cost.

Deductible The amount the insured is required to pay prior to certain benefits beginning.

Health Maintenance Organization (HMO) A group of medical providers who provide services to members through pre-paid contracts, which guarantee the availability of care within the group (or network) of providers.

Health Savings Account A special kind of savings and investment vehicle that has a tax status given to it allowing tax deferred deposits up to stated yearly limits, tax-deferred deposits up to stated yearly limits, tax-deferred interest, and tax-free withdrawals for qualified medical expenses.

High Deductible Health Plan (HDHP) A health insurance plan offered by insurance companies, qualified by the IRS to allow an insured individual to open and make deposits to a Health Savings Account.

In-Network Providers that have signed contracts to provide services at an agreed upon rate to insured individuals of a specific insurance company.

Individual Deductible The amount of covered services that must be paid by the insured themselves at 100 percent before the insurance company begins reimbursing any expenses.

Lifetime Maximum The stated amount in a health-insurance contract that is the most that can be paid while insured under that contract.

Network A group of medical service providers who have signed contracts with a specific insurance company to provide services for negotiated fees, usually discounted from their usual fees.

Out-of-Network Providers that have not signed a contract with a specific insurance company.

Out-of-Pocket Maximum The amount of expense incurred by an insured individual that, when reached, causes the insurance company to then pick up 100 percent of the expenses. The deductible may be included in this amount, as in the case of High Deductible Health Plans.

Point-of-Service Plan (POS) A health insurance plan that requires a primary care physician to manage the insured’s care and refer to specialists. Usually includes office visit co-payments and low deductibles.

Preferred Provider Organization (PPO) A group of medical care providers who have contracted to provide their services to a specific insurance company at a negotiated rate.

Premium The amount paid, usually on a monthly basis, to an insurance company in exchange for coverage by a health-insurance contract.

Preventive Care Medical services offered to individuals to help maintain health and predict possible health risks.

Well-Baby Care Medical services provided to infants and toddlers that is primarily preventive care.