Though I promised to make the “Mind the GAP” blog a transparent portal to share the inner workings of gap intelligence, I have to admit that we have been a bit shy.
Not that we have an excessive amount of skeletons in the closet, getting crushed by the global economic downturn, or have figured out how to spin hay into gold.
We are just a simple organization. It’s hard to share juicy gossip about our two person law firm, accounting system, and our climate controlled office.
The single hardest check for me to sign every month since starting the company has been health insurance. During the very early days of the company, we used Aetna for health insurance, which my agent at the time coined the “Honda” of health insurance companies. The monthly premium was under $200 and it seemed to work as I rarely went to the doctor.
Then I hurt my back.
A severely herniated disc in my back rendered me about useless. I couldn’t walk without a cane (literally), could only sleep on the floor, and lived in general misery for over four months. During that time, I went to the doctor, got a MRI scan, and went to physical therapy.
My first dose of health insurance reality came after the MRI – a $1,500 procedure that Aetna was only so eager to pay $500 of.
$4,800 in premiums to save $500 on a MRI – it did not make sense.
After my MRI bill the company switched from Aetna to Blue Cross, who was eventually purchased by Anthem. I have no complaints about Anthem formally, only because my back mended quite well and I have been to the doctor twice in five years.
However, I cringe at the thought of writing that check to them every month, knowing that its money literally flushed down the commode. For example, my monthly premium (36 male, non-smoker, and generally healthy) is about $330 and the monthly premium of our younger employees is $266 (26 year old female). Every July, I am promised that my premium will increase, all the while our actual benefits decrease.
A recent change in our policy from Anthem eliminated the $30 co-pay after 12 office visits a year – after which Anthem only covered about 50%.
Yes – 12 office visits is a lot and most people don’t go to the doctor more than once a month.
However, my bad back, from initial appointment, check ups, MRI, MRI reading, X-Rays, and physical therapy easily put me over the 12 visit limit.
With the economic hardships faced through 2009, gap intelligence like any company has reviewed our expenses and searched for ways to lower costs. Admittedly, one of the first areas to get my attention was our health insurance bill, which has led us to be among the first to embrace the Health Savings Account (HSA), a new style of health care. HSAs were a topic that both our former and current Presidents have talked about repeatedly.
I explain it here (not really).
HSA in a nutshell: premiums are literally cut in half, but at the sacrifice of a very high $3,000 deductible.
Once over that deductible, Blue Shield (our provider) covers 100% of all medical expenses for the year and to help ensure that we don’t go over that amount, Blue Shield also provides 100% coverage of all yearly check ups and physicals.
Now, for that tricky $3,000 deductible a Health Savings Account is established for each employee. The employee can contribute pre-tax money into the HSA account as well as the company (which we are) that will eventually fill up that $3,000 deductible void.
Unlike a monthly premium, which we will never see again, contributions to a HSA can roll over and accumulate interest in a savings account. From my rudimentary math skills, if I had used a HSA during the early days of gap intelligence, I would (minus my bad back) have about $7,800 in my account right now. This $7,800 essentially assures me of at least two years of paid medical bills at virtually no cost to my personal checking account – and that’s an absolute worst case scenario.
The team here at gap intelligence is young and (touch wood) healthy, which is luxury that enables us to make this move.
In the short term as our buckets of savings are low and our deductible is high, things will be admittedly tense.
However, in the long term the HSA plan makes more sense and rewards those who take care of themselves and affords us a way to save for our later years when our medical costs are significant.
We have a lot of young, single people here, but we also have three families.
I don’t know if a HSA is the perfect fit for all involved, but we are going to try to make it work. Worst case scenario – back to Anthem and our monthly premiums. We’ll let you know.
