Healthcare Cost Saving Strategies - Healthcare costs are on the rise

Health care Costs Are on The Rise
An HRA may be the answer to take back control

You Choose
Astoundingly, the rise in the cost of health care is surpassing the rise in average income as shown below. As an employer you have choices. You can continue to pay the increase in health care costs of 10% a year or more, OR search for innovative ways to possibly save thousands of dollars and take back what you work so hard to earn. What is the average employees raise each year? Maybe 2 or 6 percent a year. Compare that to inflation and then to the rise in health care. Health care seems to be the single largest expense mostly everyone pays.

Everyone can gain
How can everyone benefit?
The Federal Government has created money saving programs for individuals and businesses that are a driving force of the success of this country.
Federally sponsored programs such as an HSA, HRA, and MSA, to name a few, are great programs to save money and regain the control over the rise in the costs of health care.
An HRA, or a health reimbursement arrangement, is an arrangement that is funded or not funded with before taxed dollars by the employer. The HRA is an arrangement set in place by the employer, with many possible variations, which enables flexibility for every employer and employee.
Why pay for what you may not use? HRA’s allow the employer to offer a high deductible health plan, (though not required) which contributes to the premium savings on a pretax basis.
Most businesses have the opportunity to control their maximum cost exposure while creating first dollar insurance to their employees. The goal is to create a benefit package of same value that is currently held or better at a significantly reduced cost.

What is an HRA?
An HRA, or health reimbursement arrangement, is a federally created program which creates a tax efficient method for purchasing health care services for employees. An HRA is only to be enacted by an employer and is not to be negotiated as a form of compensation. The money spent through an HRA for qualified medical expenses is considered an expense able item for the employer and considered a nontaxable item for the employee. This makes it much easier and more attractive to employees because amounts paid by the employer are excluded from the employees gross income (IRS Publication 969). Also reimbursements made to the employee by the employer, if they are qualified medical expenses, may be tax free.

Employer Advantage
An HRA allows the employer advance claim payment which reduces employer risk. HRAs are available to employers of any size. All money put through the HRA is considered an expense-able item for the company. An HRA creates a much more attractive benefit which will enhance any business employment package offered.

Make the move
Start Saving Now
Businesses everywhere can agree that saving money everywhere possible is a new initiative to sustainable business practices. In this respect, saving money does not mean cutting costs, however. With the consideration of health care costs alone, businesses have the potential to save money and increase value to their employees.

Another thought... The health care industry has named health care plans after the deductible amounts right? (i.e. high deductible plan and low deductible plan). My reason for this is that most people are drawn to the plan that sounds the cheapest up front without fully considering all the costs-- people are drawn to the low deductible plan because it sounds cheap. But the catch is it's not cheap and in fact this is how health care insurance companies make more money than they should.

So lets rename the plans. Lets now call a low deductible plan a high premium payment plan and a high deductible plan a low premium payment plan. I think you can do this because there really is an inverse relationship with the deductible and the premium payment. (i.e. the higher the deductible the lower the premium).


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