Hixme Think

White House Comes Through: Approves Personally Owned Portable Benefits for Large Employers

Denny WeinbergDenny Weinberg

Referred to as “Cash For Coverage” this regulatory action implements the administration’s 2017 Executive Order and may completely reinvent benefits for American workers.

Effective Jan. 1, 2020, employers, (especially larger employers) will be encouraged to provide truly portable, personally owned benefits to their workers. This will be on the same tax advantaged terms as their previous, limited and costly employer sponsored benefit plans. According to the Administration “42% of larger employers (at least 200 workers) offering health benefits only provide a single coverage option.”

This development is very good news for visionary breakthrough platform companies — like Hixme — already committed to transformation of benefits for large employers. In fact, these companies may well have been prophetic in their commitment to this movement.

Under this new act, here is what is possible:

FOR WORKERS AND FAMILIES:

FOR EMPLOYERS:

FOR CONSUMERS WHO BUY ON THEIR OWN AND ALL TAXPAYERS:

The authors of the regulation (officials from U.S. Departments of Treasury, Labor and Health & Human Services) predict that 5 million American workers (2.8% of those with traditional employer sponsored coverage) will be part of this program by 2022. Further, that 10 million will participate by 2024.

Industry experts suggest that this will motivate new players to develop competitive platforms of their own around these new consumer-based employer plans. One such company, Hixme, already sells a traditional group sponsored health benefit plan to large employers through a platform that is populated with thousands of consumer-owned choices depending upon worker zip code. This change will allow even more value in their product.

Conversely, traditional benefit consultants and brokers, who have depended on expensive design and actuarial services on an employer-by-employer basis, will have to think carefully about how to respond to this consumerization movement — since it’s clearly not a logical extension of the traditional group insurance model.

Industry experts suggest that this will inspire new players to develop platforms around consumer-based plans. One such company, Hixme, already sells a traditional group sponsored health benefit plan to large employers through a platform that is populated with thousands of consumer-owned choices depending upon worker zip code.

As a veteran executive of the healthcare industry, I believe this may be the most important large employer health benefits development since HIPAA mainstreamed tax advantaged savings account concepts for health care coverages in 1996.

As a veteran executive of the healthcare industry, I believe this will turn out to be perhaps the most important large employer health benefits development since the HIPAA where tax advantaged savings accounts concepts were first applied to health care coverages in 1996.

Presidental Press Release

Glossary:

Health Reimbursement Accounts (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the account. Health Reimbursement Accounts are sometimes called Health Reimbursement Arrangements.

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ABOUT THE HIXME THINK BLOG: Authored by one of the gurus of health insurance, Denny Weinberg, postings reflect market trends and the powerful emerging movements toward true portability and personal ownership by workers and their families. Postings follow these emerging trends, driven by consumer ownership of retirement benefits, consolidations by health care institutions, and the stated pro-consumerism goals and actions of the administration, federal agencies and Congress.

 

Denny Weinberg is a 35 year veteran executive in healthcare financing and operations. Prior to his 4 years as investor and CEO with Hixme, his broad background includes a 20 year tenure CEO of a number of Anthem's largest operating companies. Denny has managed a portfolio of early stage companies in the Health/Medical arena as well as other industries. He has also served as board member, advisor and consultant to both private equity-backed, and publicly traded Blue Chip companies.

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