Medfield, MA 02052
Phone: 800-528-1530 ext 117
Contact Us
Consumer-driven Health Plans Catch On;
Benemax’s 35% Growth Rate Reflects Trend
MEDFIELD, Mass.— Jan. 10, 2003—Benemax, a benefit management company that bucked the managed-care trend when it first offered consumer-driven health plans as far back as 1985, grew by more than 35% in 2002 for the third consecutive year.
Consumer-driven health plans are catching on as employers move to combat annual health insurance rate hikes averaging 16% this year. The plans are attractive because employers save as much as 25% in premiums over managed care plans without compromising routine or emergency care for employees. Treatment decisions are put back into the hands of patients and doctors—not managed-care gatekeepers.
“When informed patients have the freedom to choose, and have an economic stake in their choices, they will seek the best quality care at a reasonable cost,” said David Cowles, executive vice president, Benemax. Last year, Benemax signed on 30 new accounts and re-enrolled 95% of its existing customers.
One new customer, Invalesco Group, a healthcare consulting firm with employees located in eight states, needed to roll out a cutting-edge health benefit plan for its employees without squandering the financial resources needed to fund its rapid growth.
Invalesco’s plan, which is typical of how consumer-driven plans are structured (though there are variations), works like this: Monthly premiums are low, about $165 for individuals and $450 for families. That’s half of what a PPO Plan would cost in many markets. The deductible is $1,200.
Then, to help employees defray out-of-pocket costs, Invalesco contributes $900 a year to a tax-free Personal Care Account (PCA) for every employee. Employees can continue to see their own doctors, use their PCA money to pay most of the cost, and roll over any unused funds to the following year. Employees are responsible for claims exceeding $900 until the $1,200 deductible is met. After that, Invalesco's insurance carrier pays 100% of most covered healthcare costs.
“It’s such a relief,” said Greg Bryan, president of Invalesco Group. “We were able to offer our employees a state-of-the-art health benefit plan without charging them an arm and a leg and without breaking our bank. Plus, Benemax handles all the administration and customer service, freeing up our small management team to focus full time on growing our company.”
Clear-cut Trend
The trend to adopt consumer-driven plans (sometimes called “defined contribution”) is well underway. According to a survey in the October issue of Employee Benefit News, 11% of respondents currently offer a consumer-driven health benefit plan and 25% are considering this option.
“These numbers reflect continued strong interest in this new approach to health benefit sponsorship as all employers struggle with plan costs," noted EBN editorial director David Albertson. "Sources are telling us that 2003 will see substantial growth in defined contribution health plans, and that the 2004 plan year will be even more explosive.”
“This is hardly surprising,” said Cowles of Benemax. “Employers have to hold the line on health care costs or consider eliminating coverage. That’s the last thing they want to do.”
About Benemax
Benemax, based in Medfield, Mass., (www.benemax.com) was founded in 1985 and manages employee benefits for clients ranging from start-ups to divisions of Fortune 500 companies. The company designs and administers attractive yet highly cost-effective employee benefit packages, including consumer-driven health and dental plans.
# # #