Choosing a Copay Plan vs. High Deductible Health Plan

Offering copay health plans is indeed one way to provide employees with freedom of choice in healthcare for themselves and their families. For many, knowing that a trip to the doctor will only cost an expected copay feels safe and predictable. For the employer and the employee, this is ends up being one expensive safety net! Offering this type of plan almost always results in overpaying for insurance. Traditional health plans with copays mean that the employee likely also pays coinsurance for their expenses. For example, 80/20—whereby your employee would pay 20% of particular, defined treatments while the carrier pays the 80% of those costs.

As an employer, steering your employees toward a High Deductible Health Plan (HDHP) that is eligible for an HSA rather than just a straight copay plan as their benefit of choice will likely save money for both your company and the employee.

Understanding High Deductible Health Plans and Health Savings Accounts

Any time you are selecting plans to offer your employees, it is important to specifically consider the rate of use—and therefore the actual value of the company’s decision to offer a copay plan as their health benefit. High Deductible Health Plans (HDHP) alleviate over-payment for healthcare premiums and can still meet employees needs especially when paired with a Health Savings Account (HSA), which differs from a Flexible Spending Account (FSA).

A Health Savings Account can also bear interest. As an important part of a competitive total compensation package, this may make a difference in job offers to the best talent applying for jobs at your company.

When offering an HSA, your job offers to top talent could include the following information:

• Funds are not taxed going into an HSA, they are not taxed while growing in the HSA and they are not taxed when withdrawn from the HSA. An HSA has a TRIPLE TAX ADVANTAGE!
• Offering an HSA as an employee benefit can essentially serve as the employee’s retirement savings account for healthcare expenses.
• There are no requirements to distribute the money put into the HSA at any particular time.
• Employees can access the funds both prior to and after retirement.

At benefEx, we are highly experienced industry leaders here to talk with you any time about healthcare benefits options. We can help assess your company’s previous rate of use along with your company goals so you can make more informed coverage decisions for your company moving forward.

Discover the Value of HDHPs with benefEx Today

Considering the value of High Deductible Health Plans? Reach out to us to talk through any questions you may have. We have a tremendous amount of experience in our team and are actively helping small and mid-size businesses bounce back following COVID-19 business changes. Call benefEx today at (973) 740-2500 to discover how our employee benefits consulting services can help you!