How to Decrease Healthcare Costs and Increase Employee Benefits in 2024
SUMMARY
By continuing with their current health insurance provider (Blue Cross) under a higher deductible plan and adding a secondary plan, a company with 38 employees enrolled in a group health plan can achieve the following benefits:
- Cost Savings:
- Save over $39,000 annually compared to the cost of renewing their current plan.
- Reduce a 12.5% premium rate increase to a 4.7% increase over current costs.
- Employee Benefits Enhancement:
- Lower the employee annual deductible by $500 (from $1,500 to $1,000).
- Lower the employee annual out-of-pocket expense limit by $5,150 (from $8,150 to $3,000).
- Maintain physician office visit copays and Rx copays.
- Include 24/7 physician access at $0 co-pay for employees and dependents, with no disruption to the provider network.
CURRENT PLAN & RATES
- Current Benefit Plan (Blue Cross):
- Individual Deductible: $1,500
- Plan Pays: 80%
- Total Out of Pocket: $8,150
- Office Visit Copay: $25
- Specialist Copay: $40
- Rx Copay - Tier 1: $10
- Rx Copay - Tier 2: $25
- Rx Copay - Tier 3: $50
- Rx Copay - Tier 4: $100
- Employee Coverage Types and Current Rates:
- Employee Only: 21 employees, monthly rate: $680.22
- Employee & Spouse: 5 employees, monthly rate: $1,496.48
- Employee & Child: 7 employees, monthly rate: $1,326.43
- Family: 5 employees, monthly rate: $2,197.11
- Total Monthly Premium: $42,038
- Total Annual Premium: $504,451
RENEWAL PLAN & RATES
- Renewal Rates:
- Employee Only: $765.25
- Employee & Spouse: $1,683.54
- Employee & Child: $1,492.23
- Family: $2,471.75
- Total Monthly Premium: $47,292
- Total Annual Premium: $567,508
- Change from Current: 12.5% increase ($63,056)
PROPOSED PLAN
- Revised Blue Cross Plan (Primary):
- Individual Deductible: $5,000
- Plan Pays: 80%
- Total Out of Pocket: $8,550
- Office Visit Copay: $40
- Specialist Copay: $40
- Rx Copay - Tier 1: $10
- Rx Copay - Tier 2: $25
- Rx Copay - Tier 3: $50
- Rx Copay - Tier 4: $100
PROPOSED RATES (Primary Plan)
- Employee Coverage Types and Primary Rates:
- Employee Only: $628.36
- Employee & Spouse: $1,382.39
- Employee & Child: $1,225.30
- Family: $2,029.60
- Total Monthly Premium: $38,833
- Total Annual Premium: $465,992
SECONDARY HEALTH PLAN
- Individual Deductible: $1,000
- Plan Pays: 80%
- Total Out of Pocket: $3,000
- Plan Pays:
- $15 of the $40 Primary Copay
- $0 of the $40 Specialist Copay
- Additional Benefits:
- Reduces employee deductible by $500 (compared to the current plan).
- Lowers out-of-pocket expense limit by $5,150 (compared to the current plan).
- Provides 24/7 access to telemedicine with a zero-dollar copay.
SECONDARY HEALTH PLAN RATES
- Coverage Type Enrollment:Employee Only: 21
- Employee & Spouse: 5
- Employee & Child: 7
- Family: 5
- Total: 38
- Monthly / Annual Premium:Monthly premiums for this plan range from $89.77 to $250.56.
- Total monthly cost: $5,189
- Total annual cost: $62,262
RATE ANALYSIS
Table
Coverage TypePrimary RateSecondary RateTotalEmployee Only$628.36$89.77$718.13Employee & Spouse$1,382.39$181.03$1,563.42Employee & Child$1,225.30$163.64$1,388.95Family$2,029.60$250.56$2,280.16
- Monthly / Annual Premium:Current Primary Premium: $38,833 / $465,992
- Secondary Premium: $5,189 / $62,262
- Total Proposed Premium: $44,021 / $528,254
When you add these two sets of costs together, the Company will pay between $718.13 and $2,280.13 in monthly premiums per employee. That’s a total of $44,021 per month and $528,254 per year.
PLAN & RATE COMPARISON
Table
Coverage TypeEnrollmentCurrentRenewalProposedEmployee Only21$680.22$765.25$718.13Employee & Spouse5$1,496.48$1,683.54$1,563.42Employee & Child7$1,326.43$1,492.23$1,388.95Family5$2,197.11$2,471.75$2,280.16
- Monthly Total:Current: $42,038
- Renewal: $47,292
- Proposed: $44,021
- Annual Total:Current: $504,451
- Renewal: $567,508
- Proposed: $528,254
- Change From Current:Renewal: 12.5% increase ($63,056)
- Proposed: 4.7% increase ($23,803)
- Change From Renewal:Proposed: Savings of $3,271 per month ($39,253 per year)
Currently, the Company is spending $42,038 per month ($504,451 per year). If they renew, costs will increase by 12.5% to $47,292 per month ($567,508 per year).
Under the proposed plan, the Company will spend $44,021 per month ($528,254 per year). Employees will also have a lower deductible, a lower out-of-pocket expense limit, no disruption in their provider network, and access to telemedicine.
Compared to renewing, the proposed plan will save the Company $3,271 per month ($39,253 per year).
