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May 01, 2012 10:04:53 am

Redefining Benefit Plans

Most employer vision and dental benefits plans were designed years ago, before the existence of Health Reimbursement Accounts (HRAs), Health Savings Accounts (HSAs) or Flexible Savings Accounts (FSAs).   Employers and brokers should take a fresh look at their plans to make them simpler, easier to understand and more cost efficient.

 
Current plans tend to be “procedure based” plans with the benefits tied to procedure codes which are paid at different codes paid at different percentages, frequency or age.  Claim costs are controlled by excluding a number of procedures.  
 
An alternative is a “dollar based” plan.  These plans have only four rules to determine benefit coverage:
  • Annual maximum
  • Co-Insurance
  • Cosmetic care
  • Reduced benefits for late enrollees

Costs are controlled by adjusting the annual maximum and co-insurance rates, rather than exclusions and limitations. These plans are simple to use, and all employees receive the same benefits percentages regardless of the procedures they require.  
 
For more on the benefits of dollar-based plans, please see Employee Benefit News.   To learn about   REDW’s benefits consulting services, please contact Carol Mayo Cochran, Lisa Wilcox or David Dennis.


Tags: Benefits, FSA, HSA, HRA, Welfare Benefits, Employer Sponsored Benefits


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