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The reason your employees aren't getting the care they need

Do you remember when elective care came to a halt during COVID-19? Brokers and insurance carriers warned employers like you that the storm of claims was coming because people couldn't get access to care.

There is no doubt that many employers felt an explosion in claims over the next couple of years from this gap in care. This was highly visible because of the national attention the pandemic brought.

But lurking in the background for the last 20 years was a series of ticking time bombs from HSA plans that were thought to save money in the long run. Watch the video below to learn why HSAs probably ended up costing you money.

Today's Topic: The HSA ticking Time Bomb you didn't even know you had in my experience employers typically offer an HSA plan for one of two reasons the first is savings and that's the primary reason I see the second is tax advantages or a tax shelter for your highly compensated individuals regardless of the reason the payroll deductions are almost always the least in an HSA plan when offered alongside a traditional PPO and if you have low earners they enroll in this plan because it's all that they can afford the problem is you just inadvertently started the timer on the HSA bomb and here's why deductibles on these types of plans range from typically fifteen hundred dollars to six thousand dollars so let's imagine one of your employees is making about forty thousand dollars a year and is diabetic and they enrolled in the HSA plan they can't afford their medications so they go without them because an expensive medication is the difference between putting food on the table or their ability to pay their rent now a couple years go by and they're in kidney failure and the dialysis costs alone are costing the employer two hundred and fifty thousand dollars per year for the next three years the worst part is the employee is now in collections because they can't even afford their deductible it's unfortunate because this was preventable but the cost barrier for the employee was just too big the biggest proof of this is in 2020 when covid-19 hit the foregone care from covid-19 was a massive explosion and it was highly visible because the cause and effect happened over a one to two year time frame meanwhile the HSA ticking time bombs have been going off all around us for the last 20 years of foregone care this slow bleed wasn't as visible but I can assure you that the combined impact far outweighs anything from covet 19. so let's go back to the two reasons that employers typically offer an HSA plan and let me provide some advice the first is savings and my advice is simply here don't expect an HSA plan to save you money in the long run the short-term gain in savings is likely going to be outweighed by the long-term ticking time bombs the second reason is for tax advantages and my advice here is if you want to implement an HSA to give your highest earners a tax shelter you should do it it's a great reason but if you do just make sure you set the payroll deductions for this plan as the highest payroll deductions amongst all the plans that you offer that way you don't get people enrolling in the plan that you didn't intend to lower earners are almost always going to look for the cheapest option out there lastly if you only offer one plan and that's an HSA plan you should strongly consider a different strategy that will control costs over time.

About the Author

Mike Kroupa, Self-Funding Insurance Expert

I grew up in a house that was constantly under construction and the experience helped me uncover one of my passions, remodeling. After running a successful remodeling business with my brother during college, I decided I wanted to keep this as a hobby. Instead, I took my advisor’s recommendation and started down the actuarial path, which ultimately led me to insurance.
Since then, I have focused my career teaching employers how to better manage their health insurance plans. I found myself frustrated year after year of doing the same thing because it didn’t feel like I was making an impact. Healthcare costs were continuing to increase, and it felt like the only options employers were left with was increasing deductibles, increasing contributions, and switching carriers.

There was a turning point for me in 2020 as I found Health Rosetta, an ecosystem for scaling adoption of practical fixes to our health care system. As my clients started adopting these fixes, I found myself getting passionate about what I was doing for the first time. Then I realized my hobby of remodeling was driving the passion because I was remodeling health plans. Even better, I was having an impact because patients (employees, spouses and children) were getting the best care they ever have and saving a lot of money in the process.

Get in contact with Mike: 

Phone: 630.738.1835     Email: mkroupa@gocgo.com     LinkedIn: Mike Kroupa

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