…cont’d

Health spending accounts
A health spending account is like a budget. The employer uses it to reimburse certain healthcare expenses not covered by the group insurance policy. Accordingly, some employers choose to use this account to offset care cuts.

A health spending account is an effective tool for managing costs. That’s because the employer knows the maximum cost in advance. This account can help reduce the financial risks of claim fluctuations.

Communication
We find that employees do not understand the financial dynamics of a group insurance policy. The plan sponsor must educate employees and raise awareness about the use of their coverage.

The whole idea of offering paramedical care coverage is to enable employees to stay healthy and in shape. As a result, the use of such care will continue to play important role in extended healthcare.

Before making any cuts and changes to the current plan, it’s vital to analyze the use to make informed choices. In addition, the plan sponsor must take into account such factors as the company’s unique culture, industry and employee demographics (such as age, sex and ethnicity).

And, finally, a very important point we cannot stress enough: decisions about group insurance plans must be communicated and explained to employees. By doing so, plan sponsors can come out winners.

Sleiman Karam is a group benefits consultant at Groupe Financier AGA.