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Hybrid Benefits Plan

Hybrid benefits plans

Employers in start-up mode find they are faced with a myriad of human resource issues.  Policies, hiring, compensation, workplace management and Benefits.  The options are overwhelming, and with limited time to devote to consultation and analysis, employers are often reluctant to commit. There are options to consider. 

Health Spending Accounts – a great start-up option, but with limitations

Employers in start-up mode find they are faced with a myriad of human resource issues.  Policies, hiring, compensation, workplace management and Benefits.  The options are overwhelming, and with limited time to devote to consultation and analysis, employers are often reluctant to commit. There are options to consider.

The start-up favorite is the Health Spending Account.  This can have other names, Health Care Spending Account, Flexible Health Account, and others. The popularity of the H S A is likely due to its simplicity, the ease of set up (little in the way of admin is required), and most importantly the fixed benefit costs that are at its core.  In setting up a H S A, the employer agrees to provide up to a fixed amount per employee or family per annum.  So if you have ten employees and your H S A maximum is $1000 per employee per annum, the maximum cost for the employer would be $10,000, plus cost of administration which is say 10%, for a total cost of $11,000 a year.

While H S A’s are great in terms of fixing costs, and providing flexibility, employers also realize that they may find that the benefits they need the most, coverage for catastrophic events, like Life, Accident, and Disability are not covered at all.  It is true you can add some of these on an individual basis but this is time consuming and costly.  Some H S A providers do provide some elements of catastrophic insurance but the solutions are still cumbersome and may not provide the coverage you require.

One solution, is the hybrid benefits plan, where a base level of catastrophic coverage and medical and or dental coverage, supplemented by a base level of H S A.  You then have the best of both worlds:  the cost control provided by the H S A, AND the catastrophic coverage offered by an insured plan.

Benefits Comparison Table

Benefits Health Spending Acct Insured Plan Hybrid
Medical X X X
  Out of province    emergency X X
Dental X X X via H S A
Life X X
AD&D X X
Disability X X
Critical Illness X X
Dependent Life X X
Dependent AD&D X X
Dependent Critical Illness X X
Comments Fixed cost Higher cost Reduced cost
Lack of Catastrophic Coverage Comprehensive Coverage Comprehensive Coverage

For questions about your benefit options please call CG Hylton Inc. today at 1-800-449-5866.

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