An HDHP with HSA
According to the Kaiser Family Foundation (KFF), the average premium for an HDHP is 10-15% lower than traditional plans. This is significant since employers are now paying an average of over $25,000 per year to cover a family of four.
For a family of four, this can mean savings of $2,500 per year on premium costs. And for employers, these savings are magnified by the number of employees: A company with 25 employees that switches from a conventional group health plan to an HDHP can save upwards of $62,500 per year.
How Much Does HDHP Insurance Save?
| Plan Type | Average Single Coverage Premium | Average Family Coverage Premium |
|---|---|---|
| HDHP | $7,982 | $23,436 |
| Traditional | $8,951 | $25,572 |
| Average Annual Savings | $969 | $2,136 |
FREE QUOTE
COLORADO HEALTH INSURANCE
Consumer-Directed Health Care: Smarter Spending
HDHPs promote consumer-directed health care by placing more responsibility on workers to make their own healthcare decisions.
Employees use HSAs to pay for eligible medical expenses with pre-tax dollars. This encourages them to shop for cost-effective care and avoid unnecessary services. When employees become cost-conscious, overall plan utilization decreases.
How Consumer-Directed Health Care Saves Money
Reduced plan utilization directly impacts future premiums.
Insurers base premiums on past usage. When employees make smarter choices, claims decrease, leading to lower renewal rates. Businesses enjoy year-over-year savings by fostering responsible health care consumption.
The Role of Health Savings Accounts (HSAs)
HSAs complement HDHPs by providing tax advantages for employees and employers.
Employees contribute pre-tax dollars, lowering taxable income. Employers can also contribute to employees’ HSAs, boosting morale and retention. In Colorado, many employers contribute $500-$1,000 annually per employee, creating an attractive benefits package while controlling costs.
Best Practices for Employers Offering HDHP with HSA Insurance
- Educate Employees: Teach employees how HDHPs and HSAs work. Clear communication increases satisfaction and effective usage.
- Offer HSA Contributions: Match employee contributions or provide seed money to encourage participation.
- Provide Wellness Incentives: Promote preventative care, which is often covered at 100% under HDHPs. Healthier employees mean fewer claims.
- Use Tiered Networks: Negotiate with insurers to include cost-effective providers, especially in rural Colorado areas.
- Regularly Review Plans: Work with a ColoHealth Personal Benefits Manager to ensure the plan remains competitive and cost-effective.
Health Sharing: An Affordable Alternative
Health sharing plans offer another way to save on employee health care costs.
These plans allow members to share medical expenses. While not insurance, health sharing plans often cost significantly less than traditional options. Employers in Colorado can explore health sharing as a supplemental or alternative option for employees seeking affordability.
Note: It is now possible for employers to combine the cost savings of health sharing plans with the tax advantages of HSAs.
Learn More: The Exclusive ColoHealth HSA MEC Solution
FREE QUOTE
COLORADO COST-SHARING
HDHP With HSA: How To Start Saving
Switching to HDHP with HSA can save Colorado businesses thousands in health care costs.
These plans reduce premiums, encourage smarter health care usage, and offer tax advantages. Employers can further control costs by adopting best practices and exploring alternatives like health sharing. To learn more, or to start saving money as soon as next month, contact a ColoHealth Personal Benefits Manager today for a free consultation and quote.
For Further Reading:
