Hopper Insurance Services
Start Here

Group Health Insurance

21st Century Health Benefits: a plan design that serves the healthy majority of your employees and the few with ongoing medical costs, at the same time and for less money.

What does 21st Century Health Benefits really mean?

21st Century Health Benefits is an insurance strategy coined by Hopper Insurance Services. It is built on two ideas that came into the market after the year 2000: Consumer Directed Health Plans, which arrived in 2004, and Hybrid Financing, which arrived in 2008.

Paired together, these two ideas give an employer the most cost effective way to offer health insurance to employees in the 21st century.

The two ideas behind the strategy

  • Consumer Directed Health Plans (2004). A high deductible health plan paired with a health savings account, so the employee directs how the health care dollars get spent. It is also called an employee directed health plan.

  • Hybrid Financing (2008). The employer funds benefits two ways at once: a defined benefit, such as paying the premium on an affordable plan, plus a defined contribution the employee applies where it helps them most.

  • Together they replace the old habit of buying one expensive plan for everybody and hoping it fits.

Read about HSA benefits
The reasoning

Why offer 21st Century Health Benefits?

The case for this design is not clever financing. It is a plain look at who your employees actually are and what they actually spend.

Most of your employees are healthy

Most of your employees are healthy and spend very little on medical care in a given year. They see a doctor for an annual physical and not much else.

A rich plan does little for them

An expensive traditional plan with a low deductible and low copays provides very little benefit to an employee who rarely accesses the medical system. They pay a high premium all year for benefits they do not use.

A plan should serve the whole workforce

An employer who sponsors a health plan takes on real responsibility for how prudently that plan is run, and there is an ethical case for spending the benefit budget where it does the most good. A menu should work for the many employees who are healthy as well as for the few who have ongoing medical costs. One expensive plan for everyone serves only one of those two groups.

Ongoing conditions call for something different

People who manage an ongoing medical condition prefer affordable access at the time of service. They benefit most from a more expensive traditional plan with a low deductible and low office visit and prescription drug copays.

So the answer is not one plan for everyone

People who are healthy almost always do better with a very low cost major medical plan paired with money saved in a health savings account, rather than paying a higher premium for a traditional plan. People with ongoing costs do better with the traditional plan.

Those are two different answers, and a single plan cannot give both. 21st Century Health Benefits is simply the plan design that lets an employer give both answers at once, without paying for the expensive one across the whole payroll.

The plan

How to implement a simple 4-Step Action Plan

Four decisions. Once they are made, the benefit runs itself and the annual renewal stops being a crisis.

1

Offer a short menu of plans

Do not put twenty options in front of people. A short, well chosen menu is what makes a real decision possible, and every plan on it should be there for a reason you can explain out loud.

2

Make a Bronze HDHP with an HSA the default

Provide a Bronze high deductible health plan (HDHP) coupled with a health savings account as the default plan for all employees.

This is an excellent example of a consumer directed health plan, also known as an employee directed health plan. The employee, not the plan document, decides how the money gets used.

3

Offer a traditional Silver plan, and possibly Gold

Offer a traditional Silver health plan, and possibly a Gold level plan, for employees who need or prefer a more expensive plan with a lower deductible and low copays.

Nobody is pushed into the default. The point of the menu is that the person who needs the richer plan can still have it.

4

Change employer funding to Hybrid Financing

The employer provides a defined benefit, such as paying the full premium on the affordable HDHP. The employer also provides a defined contribution, a set amount each pay period that the employee applies where it helps them most.

Offering both the defined benefit and the defined contribution is the most equitable strategy, because it benefits older and younger employees alike.

Employee choice

Then the employee chooses

Hybrid financing works because the defined contribution is useful no matter which plan the employee picks.

Take the default plan and save the difference

An employee can accept the default health insurance plan and put the defined contribution into a health savings account.

They can also payroll deduct additional money into that HSA in order to plan for future expenses, including the substantial health expenses that come in retirement.

Or buy up to the traditional plan

An employee can opt out of the default health insurance plan and instead apply the defined contribution toward the additional premium for the more expensive traditional plan.

If the richer plan costs more than the contribution covers, they can payroll deduct the additional premium.

Educating employees is the step most people skip

Employees make good choices when they understand what they are choosing between. Most have never been taught how health insurance actually works, so they pick the plan that feels safest rather than the plan that serves them best.

We spend the time to teach the group, not just enroll it. Educated employees make more informed choices, and those choices keep saving money for the employee and the employer every year afterward.

Here is what they should be taught

  • Basic insurance education, so the words on a plan summary actually mean something.

  • The benefits of owning a health savings account.

  • How to use an explanation of benefits (EOB) to work out what they really spend in a year.

  • How to evaluate plans objectively and choose the best one for their own circumstances.

  • Best practices for using a health plan most effectively.

How health savings accounts work
Getting started

How we work with employers

We make it easy and understandable for employers to offer employee health insurance benefits. Here is the shape of the work.

1. Start with your goals

We begin with a short meeting to establish what you want this benefit to accomplish.

We ask a simple question: if you had never offered benefits before and could start over today, what would you want to accomplish, and how much would you be willing to pay? It lets employers look at health insurance through new lenses.

2. Your 21st Century Benefits Report

You complete a simple census covering the employees and dependents to be included, with dates of birth or ages.

We use it to build a customized analysis that identifies the most cost effective plans available to you, so employees get the most benefit while you control cost.

3. Implementation, and the year after

We educate your employees, distribute the Summary of Benefits and Coverage required by the ACA, and enroll everyone.

Then we stay: we handle questions and problems with claims and billing, and we meet annually to review plans and premiums.

A word about your renewal date

A large share of small group plans now renew in the last quarter of the year. That is a lasting side effect of employers moving their renewal to December 1, 2013 in order to delay the plan changes that began in 2014. It is also when every individual plan renews, and when Medicare renews.

The unintended consequence is that agents have every renewal landing inside the same two or three months, which is the worst possible time to properly educate a group of employees. Employers are encouraged to adjust the renewal date if it makes sense to.

Changing it is simple: you request a new date from the insurance company. Carriers generally welcome the request, because they are overwhelmed at December 1 as well.

Ready to look at your group plan differently?

Tell us what you want the benefit to accomplish and we will build a customized analysis for your company.

Request a Group Analysis Call (805) 966-4900