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Co-Pay, Low Pay, or No Pay

Controlling Future Health Care and Drug Benefits Costs Don't Let This Happen to You

Everyone has heard about the new super drugs that have been developed and the significant improvements they have made in peoples lives. They come at a price and sometimes that price could be as high as $20,000 to $30,000 a year, if not higher. Companies need to have a plan in place to reduce increased cost liabilities to both the employer and employee. Claims like that can be a shock to both the company and the employee. These claims happen with common diseases like crohn's disease, arthritis and cancer. They are becoming more common.

The Co-Pay challenges: A lot of benefit packages have an 80/20 co-pay agreement. The employee pays 20% of costs. It can work well until some kind of expensive, unusual claim arises. A $20,000 claim would cause an unexpected $4000 expense to the employee to cover the co-insurance portion. Not only that, the employers claims experience would go way up because of their portion of the claim and there will be an overall price increase in the benefit costs in future years, because of high claims experience.

The Low Pay challenges: The employer, in order to protect itself against large claims and thus large future price increases, puts a cap on the drug and/or medical plan at say $2500, $5000, or even $10,000 per year. It seems generous enough until an unusual claim occurs. Now the employee is caught with all costs exceeding the caps. Are you aware of the integration programs that may be available for this situation? They happen. The employer also faces renewal increases based on claims to the maximum for this employee.

The No Pay Challenge: The employer puts stringent limits on the pay outs in a benefit package, or in fact, offers a payroll increase to employees in lieu of a benefit package. Nothing to discuss here because we all know what will happen when the unexpected medical challenge happens. It's like all insurance, you never need it until you need it. There is a place for it.

The Benefit Guys offer affordable, meaningful options. Whether you already have a benefits plan or are considering implementing your first one, give John or Jordan a call for a complimentary preliminary discussion. We have access to the best plans and the best advice available today. We filter it and make it available to you. We're good listeners.

"No matter how many employees you have - it's perfect. And it starts with one!"

Our Best Practices Annual Review is available for download. You need to reduce your benefits liability exposure. The content in this document will help you. Not sure where you might fit? Take a look at one of our Strategic Partners information on the balancing of insurance and compensation. Use the questionnaire to guide your thinking process.

Click on any of the links above for further, more detailed information.