• |
An employer purchases a high
deductible health plan which replaces their
existing coverage. Generally, the new premium
will be 15-25% lower than the prior plan. |
• |
The employer decides the new employee
deductible amount and how closely they desire
to modify the benefits of the original plan
of benefits. |
• |
The employer self funds the difference
between the old plan benefits and the new deductible. |
• |
The high deductible plan may be fully
insured or self funded. |
• |
To the extent that all participants do
not spend the full difference, the employer
generates a savings which they get to keep. |
• |
The average amount of savings
spent by participants is 50%, yielding a 50%
savings for the employer. Actual savings will
vary by employer. |
• |
Eligible expenses may include all Section
123(d) expenses or may be limited to those eligible
expenses defined by the employer in the Plan
Document. |
• |
Medical expense reimbursement plans are
governed by IRS Code Section 105 and are subject
to discrimination testing. |
