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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:

1. 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.

1. 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).

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