The new plan included a “Post-Deductible HRA (Health Reimbursement Arrangement)” with a $2,000 single/$4,000 family deductible (any previous expenses that count toward the deductible were credited).
Here’s how it worked:
- Given the mid-year plan change, the Board of Education wanted to provide a financial safety net for the district staff. Therefore, once an employee’s medical expenses exceeded $500 single/$1,000 family, the board approved an HRA to cover expenses until they reached a total of $1,000 single/$2,250 family.
- If the medical expenses continued and exceeded that amount, the employee kicked in the remaining $500 single/$750 family until the plan’s deductible was met.
- Once the deductible was met, as is the case with most high deductible plans, the plan paid 100% of covered expenses thereafter.
- The consultant and the not-for-profit insurance carrier also introduced a new tier – the Employee-Plus-One tier – which had the same plan design as the family plan but offered those participants a lower premium.
- The mid-year plan saved employees approximately $200 single/$800 employee-plus-one/$500 family in premium contribution.
Overall, the consultant and the insurance carrier saved the school district over $1 million dollars, avoided the loss of over 20 jobs, and allowed the district to increase all employee wages.
The following year the district kept the same plan but re-arranged the employer contribution toward the medical savings accounts, increasing the employee’s out of pocket costs by $250. They also provided participants with more options to plan for and save for future health care costs.