|
|
| e-News
Bulletin |
Issue
5 - November 23, 2005 |
In
this issue:
- Why Health Care Spending Accounts Make $ense
- Employees take ownership for health expenses according to the sanofi-aventis 2005 Healthcare Survey
Why Health Care Spending Accounts Make $ense
Employers are continually under pressure to manage the costs of their employee benefits program while at the same time offer a competitive plan that gives employees choice and flexibility. Adding a health care spending account (HCSA) to a traditional benefits plan is one way for companies to balance cost and flexibility and to meet the needs of a diverse workforce.
What is a Health Care Spending Account?
A HCSA operates in a similar way to a bank account. It is a health and dental benefit plan feature which can be part of a traditional or flexible benefits plan. Employees use the HCSA to pay for eligible health and dental expenses not covered by their group benefits plan or provincial health insurance plans.
What are the Benefits of a HCSA?
A HCSA gives employers and employees more versatility with their benefits plan. A spending account gives employees increased involvement and more choice in their benefits while also limiting an employer’s financial responsibility.
For employers that have a traditional benefits plan and want to give more value to employees but don’t want the complexity of a flex benefits plan, the HCSA is an ideal solution. The administration is very simple and employees perceive this feature as an added value to their plan.
HCSAs are ideal to offset health and dental benefit maximums, coinsurance situations, and to pay deductibles. The range of coverage under a HCSA is much broader than a traditional benefits plan. For example, the spending account can provide reimbursement for:
- prescribed over-the-counter medications
- elective surgery e.g. cosmetic, laser eye surgery
- home care
It can also broaden the scope of coverage. For example, in addition to expenses usually reimbursed, a HCSA can provide reimbursement for:
- Dental services not covered by the plan e.g. orthodontics, implants, crowns or bridges.
- Eye glasses and contact lens expenses not covered under the basic plan or expenses in access of the plan
- Chiropractor, physiotherapy and massage therapy services
- Prescription medication not covered by the plan
The HCSA ultimately gives employers the option to make a benefit plan more attractive, while maintaining a core plan that serves employees who have unexpected health problems.
How does a HCSA work?
If an employer is adding a HCSA to a traditional benefits plan, the company would fund the spending account. Each employee would receive an allocation of funds to access for health and dental expenses. As reimbursements are made, the balance is reduced until there are no more funds in the account.
There are government rules on how the spending account is operated. For instance, unused funds in the account can be carried over up to one year. In this case, at the end of a two-year period, unused funds are forfeited by the employee.
If you would like to explore your options and further understand how both your company and employees can benefit from a HCSA, call Don McGowan at (416) 805-9999.
[Back
to Top]
Employees take ownership for health expenses according to the sanofi-aventis 2005 Healthcare Survey
This year’s survey results from the 8th annual sanofi-aventis Healthcare Survey gives employers insightful information on how they are meeting the needs of their plan members and provides food-for-thought on how plan sponsors can enhance the design of their own benefits plan.
The survey polled 1,500 employees from across Canada and there were three overriding conclusions:
- Employees recognize that resources of the public health care system and the health benefit plans are not limitless.
- Employees are willing to make choices when it comes to managing health risks and costs to maintain core coverage.
- Employees want their benefits plan to be flexible, tailored and responsive to their needs and health decisions.
Here are some key findings of the survey:
- In 1999, 73% of plan members reported that their benefits plans met their needs “extremely well” or “very well”. In 2005 that figure slipped to 56%.
- Plan members’ understanding of their benefits plans has increased (72%), which corresponds closely to job satisfaction and employees’ sense of obligation to help their employers control costs.
- 73% of respondents agree that they have an equal part to play in helping to control their plan costs.
- 80% agree that employers should start including coverage for services that are reduced or eliminated from provincial health care plans.
- 72% confirm that they consider the costs of a product or service before pursuing those covered by their benefits plans.
- 60% of those polled said that they wouldn’t be willing to give up their benefits package for cash (at $11,000 trade-off) - even though most plan members wouldn’t receive anywhere near that amount in benefits in any given year.
To read more about the survey results, go to www.sanofi-aventis.ca.
If you would like to assess your current plan and review different options for plan design, like adding a health care spending account, contact Don McGowan (416) 805-9999.
Disclaimer:
The opinions and advice in this e-News Bulletin are provided
for the general guidance and benefit of McGowan Insurance
Services Ltd. customers based on information we believe to
be accurate. We cannot guarantee its accuracy or completeness
for individual circumstances. While we strive to provide reliable,
informative material herein, we cannot account for all industry
conditions and legislative changes that occur. |
