Introduction
In an era of rising healthcare costs and increasing emphasis on employee wellness, preventative health programs coupled with Section 125 plans offer a powerful solution. This article explores the challenges in traditional healthcare and how Flex Health’s approach addresses these issues while leveraging the benefits of Section 125 cafeteria plans.
The Problem with Traditional Healthcare
Rising Costs: Healthcare expenses continue to increase year over year, putting pressure on both employers and employees. According to recent studies, the average annual premium for employer-sponsored health insurance in 2021 was $7,739 for single coverage and $22,221 for family coverage, a 4% increase from the previous year.
ACA Compliance: Employers must navigate complex Affordable Care Act requirements, which can be time-consuming and costly. Non-compliance can result in significant penalties, adding another layer of complexity to healthcare management.
Limited Flexibility: Many traditional plans offer little room for customization to meet individual needs. This one-size-fits-all approach often leaves employees with coverage that doesn’t align with their specific health requirements or financial situations.
Tax Burden on W-2 Employees: W-2 employees often are the most taxed individuals in the United States, limiting their ability to invest in their health. Traditional healthcare benefits are often provided post-tax, reducing the employee’s take-home pay and potentially discouraging them from opting for comprehensive coverage.
Low Emphasis on Prevention: It is estimated that 80% of chronic diseases and terminal illnesses are preventable. Furthermore, the bulk of traditional healthcare costs are linked with treating these diagnoses, after it is too late.
How Flex Health Started
Flex Health is a Section 125 program oriented around preventative health.
As Obamacare became federalized over the last decade and major medical premiums became more expensive, the cost of virtual administrators and telemedicine has gone down at the same time, making these services more accessible. Flex Health aims to make preventative healthcare more accessible while offsetting the cost of major medical premiums and helping companies gain more flexibility.
Flex Health’s partner, HCMC, spent numerous years and amounts of upfront capital testing the right network of healthcare vendors. Today, the program provides employees with the best preventative experience while ensuring minimal integration challenges for companies.
Partnering with an underlying group policy carrier, the program was proposed to the Department of Insurance and successfully approved in 2019. By maintaining a 30-35% employee benefits engagement rate, Flex Health has been able to continue operating the first program of its kind while expanding preventative healthcare to more clients.
Preventative Health Focus
Flex Health’s preventative health approach leverages several key factors towards improving employee wellness:
Technological Advancements: Flex Health is a completely virtual healthcare program, from its assessments, screenings and appointments, to its digital health coaching. Thanks to a carefully tested network of vendors, Flex Health incorporates these technologies to provide efficient, cost-effective care for employee wellness.
Comprehensive Benefits: Flex Health offers employees several $0 co-pay benefits to supplement major medical coverage for overall employee wellness:
- 24/7 Telemedicine Access: A virtual urgent care service through phone and video offering employees immediate access to primary care physicians, therapists, and on-demand health counseling.
- Biometric + DNA Screenings: A one-time comprehensive DNA screening and a once-a-year biometric screening can help employees gain insight on their health variables and predict critical illnesses before they onset.
- Rx Coaches: 70+ common prescription drugs with $0 co-pay for employees plus unlimited appointments with licensed RN health coaches for overall well-being.
- Mental Health Support
- Nutrition Counseling
- Health Risk Assessments
- Smoking Cessation Training
- Chronic Disease Management
ACA Compliance: As an add-on, Flex Health offers an enhanced Minimum Essential Coverage (MEC) plan helps ensure ACA compliance while providing valuable preventative care services.
Employee Retention: Preventative health programs can boost employee wellness, satisfaction, and retention. By offering these employee wellness benefits, companies demonstrate a commitment to their employees’ long-term health and well-being, fostering loyalty and reducing turnover.
Section 125 Savings
Flex Health’s approach also delivers significant financial incentives for employers and employees alike.
No Upfront Cost: Employers can implement the program without initial investment, making it accessible to companies of all sizes.
Employer Savings: Companies save an average of $600-700 per employee per year in FICA contributions. For a company with 100 employees, this could translate to $60,000-$70,000 in net annual savings.
Employee Paycheck Increase: Employees see an average increase of $70-90 per month in their take-home pay. This additional income can be significant for many workers, potentially amounting to over $1,000 per year.
Win-Win Incentive Structure: Flex Health is compensated through an administrative fee for each employee enrolled after the first successful payroll run. Flex Health covers its internal costs through working with the same clients years and years on end, getting compensated as a portion of the tax savings incurred by the employer.
The Bottom Line
By combining preventative health measures with the tax advantages of Section 125, Flex Health offers a comprehensive solution to the challenges of traditional healthcare. Companies implementing programs like Flex Health can enhance their supplementary benefits while simultaneously improving their bottom line and employee wellness. This innovative approach not only addresses the rising costs of healthcare but also promotes a culture of health and wellness within organizations, leading to healthier, happier, and more productive workforces.
