A cost effective way to enhance healthcare benefits
October 2, 2024
Small Company Case Study
THE CHALLENGE
A high-tech manufacturing firm with 26 full-time employees offers two medical plan options. The base plan was a bronze level PPO and the buy-up option, a silver level PPO. The company’s contributions amount to 100% of employee-only premiums and 25% of dependent coverage for the base plan. Only the four owners were buying up on the medical. All had out-of-pocket expenses to varying amounts and all were interested in a richer benefit package.
THE SOLUTION
Upon renewal, they eliminated the buy-up option and added ExecSelect for the four owners and their dependents, which covers most out-of-pocket expenses associated with the underlying medical plan, but also affords them first dollar coverage for many other types of medical expense including dental, orthodontia, hearing aids, speech therapy, infertility treatment, vision care, and alcohol and/or drug abuse treatment.
ESTIMATED EMPLOYER AND EMPLOYEE SAVINGS
The following chart compares ExecSelect Premium cost to an increase in pay or bonus. This case example is based on a company covering four executives and their dependents that have a total of $30K in out-of-pocket medical expenses in a year. We use a 40% tax rate that includes both corporate payroll tax liabilities and individual income tax. By offering ExecSelect, a savings of $13,500 is realized annually.