- Consumer driven health plans (CDHPs) can save employers 20-40% on premium contributions and lower long term costs through reduced trend and utilization. Employees also benefit by becoming healthier consumers of healthcare. - A study found CDHPs can save employers up to 29% compared to standard PPOs due to decreased over-utilization, increased preventative care, and participation in wellness programs. - CDHPs empower employees through health savings accounts that allow tax-free savings for current and future medical costs while also building wealth over time. However, a gradual transition plan is needed and lower-paid employees may not contribute.

1. Employee Health Insurance: Why Every Small business should consider a CdhpPresented by Triangle Business Advisors

2. Can Your Company Afford These Premium Increases?

3. A unilateral agreement between the employer and insurance company to pay the claims of the employees and their dependents. Premiums are a projection of estimated claims from the risk of your employee group. What is Health Insurance?

4. Where Does Your Premium GoMost of your insurance premium actually goes to your medical expenses. Insurance companies target profits average between 1and 3%.

5. What Comprises Health Insurance Premiums?There are three major components of health insurance: “Trend” is an unknown factor and can adjust from month to month.

6. History of Medical Insurance

7. BLUE CROSS/BLUE SHIELD Medical and HospitalIn the beginning of pre-paid health plans, Blue Cross was a “hospital only” plan and Blue Shield covered general medical (non hospital) expenses

8. Advent of Major Medical PlansMajor Medical Plans combined both hospital and medical insurance with common deductible and coinsurance costs to the consumer.

9. Health Maintenance Organizations(HMO’s) Come to the MarketAs medical costs rose, HMO’s were developed to control utilization while encouraging preventative medicine, offering free physicals etc. and introduce patient co-payment

10. Preferred Provider Organizations (PPO’s) Create Provider DiscountsCost controls for PPO’s were developed to increase the doctor to patient ratio by limiting the number of doctors in the network in exchange for the practice of cost effective procedures.

11. Point of Service Plans (POS) and Dual Option Plans Dual option plans were introduced in the late 1980’s in an effort to compete with HMO’s. Companies could offer one plan vs. major med and HMO, to avoid anti-selection.

12. Today we have POS Plans with DeductiblesIn an effort to stop rising insurance costs, deductibles were added to co-pay POS plans. Today 90% of employees in dual option plans utilize in-network plans due to out-of- pocket costs.

13. Double Digit Rate Increases

14. Out of Control Utilization by Employees

15. Health Care Inflation

16. Disjointed Healthcare SystemWhat Employers are Facing

17. The affects of TrendTrend is a projection of medical inflation. Trend has a Compounding effect on premiums. These charts show the escalating effect on premiums at a 10% Trend Factor10% Trend increase yields a family monthly premium of $3,400 Per monthAdjusted for inflation family premium will be $2,400 Per Month

18. No one can predict what will happen if the Government gets more involved in health insurance.

19. Discount networks are effective, but do not control inflationary costs.

20. Physicians are still practicing defensive medicine (better description of this?)

21. Health insurance premiums will rise if the current method of reimbursement for health care is continued.

22. Wellness programs are still popular, but have not produced the results expected.

23. Unhealthy people will continue to be unhealthy until one of three things happen: 1) They are financially penalized for being unhealthy via insurance costs; 2) They have a medical life event; 3) They are required to pay significant out- of-pocket expenses.Health Care In the Future

24. The consumer must be involved in the decisions relating to purchase of health care coverage.

25. The medical care system must become price sensitive

26. Pricing must be re-bundled

27. Tort reform is enacted to lessen the practice of defensive medicine.

28. A decrease of medical malpractice insurance premiums.