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Employee Benefit Trust

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RBS/ANH High Deductible Health Plan (HDHP) rating

Based on claims experience, and the number of employers subsidizing employee out of pocket costs with generous tax-favored account contributions, Trust HDHP’s were not rated appropriately. In fact, the premiums were too low to adequately cover claim costs.

In 2015, the Board of Trustees (BOT) made the decision to increase the premium of the HDHP 6% plus trend each year for three years. Plus a tiered rating approach based on employer contributions to tax-favored health plans would be implemented in 2018.

A win for consumerism

Over the past year, actuarial studies are indicating that employees tend to treat the funds in tax-favored accounts as their own, and spend it wisely. However, even with the potential for higher consumerism, Trust premiums are still too low based on plan usage.

Premium increases stand – tiered rating structure delayed

After careful review of the new information, EBAC discussed and recommended to maintain the 6% plus trend increase for 2017 but delay implementing the tiered rating structure to 1/1/20. The BOT agreed and asked Trust staff to further study the effects of tax-favored accounts on consumerism when enrolled on a high deductible health plan.