“The first $8,000 is on me. The next $8000 is on you. Everything above that is back on me” said the employer. “Whatever you don’t spend of the first $8,000 is yours to keep.”
How It Works
- Employer gifts $8,000 at the beginning of the plan year through a debit card which can be used for medical expenses of any kind including OTC drugs. Any money left over at year end is rolled over to the next year or gifted after tax to the employee. Used amounts are not credited to the core medical plan which is excess coverage.
- Once the $8000 is exhausted during the plan year the core medical plan provides excess coverage after an $8,000 deductible.
- Once the deductible is met the employer pays all eligible claims up to $100,000 after which stop loss insurance kicks in. Or, employer funds the MedSave Compassionate Care Plan for those plan members who qualify.
Statistics show that 40% of the group will earn an extra $8,000, 52% will earn an extra amount less than $8,000 and 6% will blow through their $8,000 debit card gift. This utilitarian approach to health care finance will benefit 80-90% of the group in higher wages and save on insurance premiums.
This plan can be structured in various ways depending on budget constraints. A plan’s current budget can be the basis from which cost factors can be backed out appropriately based on experience rating.
