It is the annual benefits enrollment period, and your company has given you a new option to consider for your health-care plan. Every year during the annual enrollment period, you have the option to either keep your current health-care plan or enroll in a different offering. You have participated for several years in the company’s Health Maintenance Organization (HMO) plan; however, this year the company introduced a health savings account (HSA) combined with a high-deductible health insurance plan (HDHP) as an option. You just attended the company’s annual benefits meeting where this consumer-driven approach to health care was introduced. While you know that the company is offering this new option to try to control overall health-care costs, you liked that they discussed the importance of employees making choices about their health care. Under your current HMO plan, you feel like your health-care options are limited. You are generally healthy and have appreciated the ability to see a physician with a relatively low co-payment requirement, keeping your out-of-pocket medical expenses low. However, you page 162have been frustrated by the limitations of the HMO program. A friend suggested a new physician to you, but because the physician is outside of the HMO network, you have not been able to see the new physician. Further, there is a medical specialist that you would like to see related to a knee injury you sustained in college, but because you are not currently experiencing pain, your primary care physician does not agree that you need to see a specialist at this time. You can only see this specialist with a referral from your primary care physician. The company’s new option of the HSA and HDHP is interesting to you. It would allow you to set aside pre-tax earnings in the HSA to pay your health expenses. The company will also contribute a monthly amount to the HSA. The HDHP does have the high deductible that you need to meet before the plan pays benefits, but then all of your health-care expenses are covered once you meet the deductible. Further, you can use the funds from the HSA to pay for all of your health-care expenses. You also pay a monthly premium to participate in the program, but it is slightly lower than the premium you pay to participate in the HMO. You think that this new plan offering could give you the choice and control you want in your health care, without exceeding the out-of-pocket expenses that you currently pay. As you consider your options, you look at your medical expenses from last year. You think this is good starting point for your decision-making, but you remind yourself that health is not always predictable. That is, you could have an injury or illness that would greatly increase your expenses. While it is difficult to project your exact health-care expenses, you know that you are young and generally healthy. You decide the best next step is to speak with the Benefits Specialist that the company makes available to help you make your decision.

Overall, what are the pros and cons of the high-deductible health insurance plan and health savings account option? What questions should you ask the Benefits Specialist to help you make your decision?

Expanding Health-Care Benefits Building Partners is a full-service construction company that manages large-scale building projects. The company employs a wide range of construction professionals, from skilled trades to project management and engineering. Since it was founded just five years ago, Building Partners has grown into the premier construction management company in the region, and last year was the company’s most profitable year yet. Building Partners is known in the industry for its competitive pay and overall positive workplace culture. However, the company benefits programs are limited. The company offers a decent retirement plan, but it only started offering health-care insurance after it was required to do so when the company grew to more than 50 employees just over a year ago. Up until this point, the limited benefits programs have not had a significant impact on the company’s ability to recruit and retain employees. Many of Building Partners’ competitors are small companies that do not provide any benefits. However, as Human Resource Manager Devon Smith prepares a year-end review, he notes that with the company’s current solid financial position, the company can afford to expand its benefits offerings. Building Partners plans to continue to grow, and a more generous benefits program could help attract highly qualified new employees from not only their local competitors but also from a broader geographic region. The company currently offers employees a very basic health-care insurance plan. Employees only have one option—a Health Maintenance Organization (HMO). The plan provides inpatient and outpatient care, emergency room care, and other physician services. Employees are generally satisfied with the plan, but Devon knows the company could do better. Over the last few weeks, he has held focus groups with various employees and there is much interest in expanding health-care benefits. The employees report that the HMO page 163only provides basic services and employees discussed other needed health care such as dental, vision, and prescription drug coverage. Devon has reached out to the company’s insurance broker and has information on several options to expand the company’s health-care insurance program. First under dental insurance, there are three different options: a dental fee-for-service plan, a dental service corporation, and a dental maintenance organization. As he looks through the information in front of him, it seems that the dental maintenance organization operates like the HMO that employees currently have, which might make it easier for them to understand. He also has information on vision insurance and prescription drug plans. The prescription card plan for prescription drugs includes an option for a mail-order prescription drug plan. Devon thinks mail-order looks like an interesting option as it has lower costs for any employees who have monthly prescription needs. Finally, in the employee focus group discussions, the employees noted that out-of-pocket health-care expenses are a challenge as well. Devon believes the company should also explore offering a Flexible Spending Account to help employees with those expenses.

Would it be valuable to add insurance plans? Why? What advice would you give Devon as he reviews the options? How would a Flexible Spending Account help the employees with their health-care expenses? What are some drawbacks or risks of offering a Flexible Spending Account?