H&M Plating in Houston recently replaced traditional group health insurance with a unique approach to health benefits, saving 20% from their previous high-deductible health plan.
Casey MinshewUsing an Individual Coverage Health Reimbursement Arrangement (ICHRA), employees are happier and save money.
H&M Plating has 165 employees who work on grinding, plating, and polishing critical components and replacement parts to keep vital industries running. Parts include 30-foot mud screws, rotors, turbine shafts, compressor internals, and hydraulic housings and shafts.
The company had a couple of seriously ill employees on the group health plan, and premium increases were outpacing profits. They switched to a Professional Employer Organization (PEO) plan with a master policy, and rates got better for a while. A few years later, Blue Cross was cheaper, then United Health was next, and so on.
ICHRA Strategy Better For Employees
Art GoetzThis year, their insurance broker advised increasing the deductible to $6,000 to keep the premium increase down to just 10%, saying it was “a victory” and adding, “It could have been worse.”
Unfortunately, H&M had bumped it from $3,500 to $5,000, losing a few key employees almost overnight. It was a big win for the competition and an expensive setback for the business. It also sent a terrible message to their hard-working employees.
After meeting with Scoop Health, the owners were surprised to realize that an ICHRA strategy would benefit their employees.
“They were still skeptical of the analysis that projected a 20% savings compared to their group insurance, and rocking the boat with employees was a huge topic of concern for management,” says Art Goetze, CEO of Scoop Health in Houston, which helps companies replace expensive health insurance with new, more affordable approach to health and healthcare.
Migration Process Took 90 Days
After much hand-wringing, hand-holding, and employee education, H&M took the leap and replaced group health insurance, a migration process that took about 90 days. The results are better than projected, with around 5% of total earnings savings. Without group insurance, annual renewals are simple and planned; no more big surprises come in the fourth quarter.
H&M will decide how much to contribute to employees’ health benefits, not an insurance company.
“Scoop Health educated every single employee on the new health benefits and helped them make the best choices,” says Casey Minshew, CEO of H&M Plating. “All of our employees are saving money and excited about our new health benefits. It’s even helped us to hire some key employees from our competitors, too.”
Using the new ICHRA rules, H&M employees get free unlimited primary, preventative, and urgent care. This benefit extends to spouses and kids at no cost to employees. From sports physicals and flu shots to broken bones and stitches, it is always free for H&M employees and their families. They can even access these services after work hours or on the weekends.
“This is the routine everyday healthcare that every employee needs, 100% paid for by their employer,” Goetze says. “There is never any copay or coinsurance, and the average annual savings is $1,150 for an individual and even more for a family.”
Costs 50% Less To Add Spouse or Family
With this new ICHRA strategy, instead of increasing the deductible to $6,000, employees pay just $2,500 towards eligible medical needs. There are no co-insurance or network restrictions, and employees also appreciate that adding a spouse or family costs 50% less to this major medical protection.
Under the new ICHRA approach, H&M's employees get reimbursed for routine preventative health expenses, including doctor visits, dental and vision screenings, mental health visits, smoking cessation, weight loss programs, and gym memberships.
Eliminating traditional group health insurance with an ICHRA approach has been a huge win for everyone involved. The new approach has stabilized the workforce and helped with recruiting. H&M is saving over 20% on its benefits costs, and employees are happier and healthier and saving money, too.
Visit www.ScoopHealth.com.
