Gap Policies

[ABC]

Anyone using this technique?

Where you raise the deductible (non HSA) and then the company picks up a gap policy to cover 1/2 or 3/4 of the deductible? I am not referring to supplemental.

I am thinking about entertaining this plan design for a new client I just picked up. To my surprise these gap policies are not HSA compliant.

Any thoughts on this approach?

 

[YouGotMyMoney]

How do these Gap plans work if they are not a supplement?

 

[ABC]

How do these Gap plans work if they are not a supplement?

Its kind of like re insurance.

The company takes out the policy to cover a portion of a very large deductible. The company pays all of the premium for the gap. Then if a claim occurs the payment goes to the provider.

So if there is a $5,000 deductible and the company takes out a policy to cover $3,500 for both in patient and out.

The employee is not effected by the high deductible.

As far as I know the only true gap policy out there is from TransAmerica.

 

[somarco]

MWG offers one called Premium Saver.

I looked at it several years ago and wasn't impressed. The illustrated premium savings never materialized, at least not enough to offset the cost of their program. The TA plan may be better.

 

[ABC]

I am brand new to this approach.
I just requested a gap quote on a 19 life group. It should be really interesting to see the numbers on this.

 

[somarco]

Interested in what you find. Come back with numbers to share.

 

[WBS]

how is this different from an HRA? And yes the supplemental gap plans are HSA compliant if there are no out patient benefits paid, so its not a true "gap plan"

 

[somarco]

HRA is employer money to fund OOP expenses. This is an insured product.

Other than that . . .

 

[ABC]

I got some numbers on the gap policy.

They are structured almost identical to a colonial or Aflac policy. They are age based and the premium is about the same. If you have a group with an avg age under 40 they look real good.

The problem right off the bat is the outpatient benefit is weak. With a $3,000 in patient and $1,500 out patient.

I was hoping for a same inpatient and out patient.

 

[somarco]

Did you look at the Morgan White plan? May not be any better but at least gives you something to compare.