Align Your Group Deductible with the Annual Reset and Save

For a limited period, Kaiser Permanente is giving small groups that are currently enrolled a chance to downgrade to another plan in January. This is especially helpful for businesses that are interested in switching from one deductible plan to another deductible plan as it will allow members to synchronize their health benefits with the deductible cycle, which is based on a calendar year. Because companies can only move to a less robust plan, the change would also result in a lowered premium.

What is the benefit of synchronizing benefits with the deductible cycle?
Every January, the deductible amount resets to zero no matter what kind of Kaiser Permanente deductible plan you are on. If, for example, you purchased your group health insurance plan in July 2010, expenses you paid towards your deductible between July and December 2010 will be disregarded in January 2011; they will not carryover. If on your regular renewal date of July 2011 you decide to move to a different deductible category, then your deductible will reset again; deductible-based expenses between January and June 2011 will be disregarded and you start accumulating at zero level again.

The special open enrollment allows you to switch plans at the beginning of the year so that your deductible zeros out once instead of twice potentially. Synchronizing allows you to apply all deductible-based services that you receive from January through December’2011 towards your annual deductible, as well as your annual out-of-pocket maximum.

How much of a savings could I anticipate?
The premium savings will depend on the member’s age and if dependents are covered, the location of the business, and the plan they are switching to. In some cases, you will not only save on the cost of the premium, but also on your share of the cost for some of the medical services. Scenario examples are provided below. Note: The price samples below are based on rate year 2011.

For a 50-year old group member who works in the Sacramento area and is switching from the $0/2000 HSA to the $0/2700 HSA Plan, the annual premium savings in 2011 would be approximately $852. The trade-off is that under the $0/2700 HSA, the annual out-of-pocket maximum would increase to $4500, instead of $3500 under the $0/2000 HSA.

If the same 50-year old member switches from the $0/2000 HSA to the $40/2000 HMO Plan, the annual premium savings would be approximately $384. In addition, they will also save on doctor visits and prescription benefits because under the $40/2000 HMO Plan, these services are not subject to the deductible. The more often they need to see the doctor or get prescriptions, the greater the savings from the HSA option. The only drawback to this plan change is the annual out-of-pocket maximum. If a major medical incident occurred, the maximum amount that the member would be responsible for would increase from $3500 under the $0/2000 HSA Plan to $4500 under the $40/2000 HMO Plan. If you tend to go in for doctor visits and/or obtain prescriptions often, then, switching plans makes sense. If, however, you prefer to have a lower out-of-pocket in the event of a catastrophic situation, then for you, it would be best to stay on your current plan.

How can I qualify for the Special Open Enrollment?
You have to be covered under an employer-sponsored plan through Kaiser Permanente, and the insurance plan you are switching to has to be less robust than the plan you currently have. Also, the next renewal date of the policy must be between April 1 and November 1, 2011. Finally, a Special Open Enrollment form must be submitted by no later than December 15, 2010.

To find out if your group plan qualifies for the limited open enrollment, apply or contact your Benefits Administrator, Kaiser Permanente (1-800-464-4000), or KaiserQuotes.com (1-866-752-4737).

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