HRA Example #2

HRA with Second to Pay Coverage
This example illustrates a high deductible health plan combined with an HRA that is designed where the employee pays first thus reducing the employee cost. This plan would be a good choice for an employer whose current plan already has a deductible.

Insurance Plan Design
Previous plan was a $500 single /$1,000 family deductible PPO plan with an 80/20 copay up to $2,500. In this case we replaced the existing insurance with a $2,000 single / $4,000 family deductible which paid for 100% of all expenses after the deductible.

HRA Plan Design
In this case the employer wanted to keep the employee responsible for the first $500. The HRA is set up to pay the next $1,000 single / $2,000 family of medical expenses. By using the CHOICE CARE CARDTM we were able to reduce the over all premium by 35%. The employer was able to save over 20% on his annual health care benefit expenses.

The employees still have a $500 deductible but the next $1,000 single / $2,000 family of medical expenses are covered through the HRA and the use of the CHOICE CARE CARDTM .

Here are a few stats about HRA’s and Second Dollar Plans:

• The average amount an employer would pay for deductible expenses is $500 single and $1,000 family.
• The average amount the employer with claims exceeding $500 single / $1,000 family would pay is $400 single / $800 family.
• 40% of insureds will have claims totaling less than $1,000 single / $2,000 family

HRA plans are very flexible and can be set up and administered in a variety of ways to provide employers with the maximum premium savings while still providing excellent coverage for their employees.