How High Deductible Health Plans Save You Money

As a business owner, you’re always looking to save employee associated costs. One of the largest of those costs is health care. That’s why employers across the country are moving towards high deductible health plans. These plans still allow the company to provide insurance while saving money at the same time.

For sometime now companies have been looking for ways to share the cost of insurance with their employees. High deductible healthcare plans are one way to do this. These plans tend to have deductibles ranging from $1,000 to $10,000. These larger deductibles bring down the cost of monthly premiums for both the employee and employer.

Some studies also show that when employees have to pay a larger share of their health care costs they tend to live healthier lifestyles which in turn decreases medical spending.

It also means less sick days and higher productivity while at work. This alone can save companies substantial amounts of money as sick days cost US companies $576 billion dollars annually.

In 2018 a new tax on what are considered Cadillac insurance plans will go into affect. This tax will increase company’s employee costs, so many companies are getting ahead of the issue and dropping these high end plans and replacing them with high deductible insurance plans now.

According to data from 54 large US companies with a combined employment force of 13 million, healthcare costs for these companies was reduced from 6.6% to 3.4% over a three year period. Even though this is short-term data, it does suggest that businesses that utilize high deductible health plans will save money on employee insurance costs over time.

While the switch from traditional insurance to a high deductible health plan may seem difficult, that is the direction the country is taking. In 2006 only 4% of employees had one of these plans and currently 20% does. Going forward, when looking for a competitive edge, businesses will need to consider making the switch.