High Deductible Health Plans
High Deductible Health Plans (or HDHPs) have become increasingly prevalent as insurers and employers seek to shift increasing amounts of the cost of healthcare onto employees. Insurers use HDHPs to continue to raise deductibles, co-pays, coinsurance and increase exclusions from policies. At the same time, insurers continue to put upward pressure on premium costs.
In response to the increasing costs of HDHPs, employers have sought to shift more of the premium cost onto their employees. In short, this adds up to higher cost and lesser benefits, a less than ideal situation for having an outstanding benefits package to recruit and retain key employees. Employers are also generally prohibited by the Affordable Care Act from establishing different classes of benefits for preferred key employees.
QUESTION: Is there a desirable alternative to this HDHP situation as employers come to realize the crucial importance of a great benefits package to recruiting, retaining and rewarding selected key employees who produce the winning results that make a company successful? The answer is YES.
ANSWER: The ExecSelect™ plan fills the gaps in coverage and addresses increased costs and reduced benefits in HDHPs. The supplemental coverage offered by ExecSelect™ reimburses the key employees selected by their employer to participate in the plan for the cost of higher deductibles, co-pays, coinsurance and policy exclusions. The ExecSelect™ plan is also exempt from the anti- discrimination provisions of the Affordable Care Act enabling employers to select key employees from the entire employment roster.
The premium costs of an ExecSelect™ plan policy are fully deductible by the employer as an ordinary business expense. At the same time reimbursement payments are excludible from the employee’s gross income. The ExecSelect™ plan is both tax advantaged and cost effective.
The premium costs of the ExecSelect™ plan are comprised of a modest fixed annual premium covering key selected employees and their family members Unlike HDHP plans, there are no fixed monthly premiums under ExecSelect™. A variable premium is due only if, as and when claims are presented. Each ExecSelect™ policy is subject to a maximum annual premium or attachment point. Once the attachment point is reached, any further variable premium cost is refunded by the underwriter to the employer.