Even though Congress passed President Obama’s health care reform bill, many Americans still have to wait until 2014 before the meatiest provisions in the legislation take effect. In the meantime, one small business in Bloomington has found a creative way to guarantee affordable health care for its employees.
Every morning Brad and Sharon Fugate brew coffee for themselves and their employees at Relish, a housewares and furniture store in Bloomington. Sharon knows exactly how each employee takes their coffee. But fresh brewed java is just one benefit Brad and Sharon give their employees: full timers – all two of them — also receive health insurance.
“There is an essential element in health care in that you’ve gotta have it,” Brad said.
But the store used to be saddled with an expensive health insurance policy.
“Originally, we did for our employees exactly what we did for ourselves,” Sharon said. “And that was buy what we could afford which was essentially a catastrophic policy- it’s a very high deductible. Farmers use it and the self-employed use it.”
But the policy had such a high deductible, employees were often forced to pay out of pocket for medical expenses. Then Relish employee Matt Andert had a problem:
“It was just me getting sick once and debating whether or not I wanted to go to the doctor,” he said.
Even though he had insurance, Andert couldn’t go to the doctor because it cost too little to meet his deductible but too much for him to afford. He told the Fugates of his conundrum and the couple decided it was time to find an alternative. After some research they hit upon Health Savings Accounts, or HSAs. Brad and Sharon got a cheaper health insurance policy with an even higher deductible. But every month they invest the money they’re saving with their new plan in Health Savings Accounts. Each employee has their own HSA and can use their money on any qualified medical expense- even procedures and medicine not covered by their original plan. Employee Jessica McClellan said that’s a major benefit.
“To get vision covered I had to turn in all of the receipts and honestly sometimes it doesn’t happen,” she said. “And then dental wasn’t covered. Those were the two things I did: vision and dental.”
HSAs may sound like a loophole, but The U-S Treasury Department website says they were actually created by a Medicare bill former President George W. Bush signed in 2003 with the intention of using the accounts with high deductible plans — just as Brad and Sharon do. And HSAs have been gaining popularity. A study conducted by America Health Insurance Plans — a national association of insurance companies — shows a ten-fold increase over the last five years in the number of people covered by high deductible plans in combination with HSAs—from one million to 10 million nationwide. According to Anthem Blue Cross-Blue Shield of Indiana, HSAs and high deductible health plans will remain relatively unchanged under the new health care law and will even qualify for new tax credits available to small group employers this year.
One year after making the decision to switch to HSAs, business at Relish looks unchanged but Jessica McClellan said the big changes are behind the scenes.
“And this is really working for us. The other way wasn’t efficient, none of us got what we needed, and it cost just as much.”
And Matt Andert, the employee who one year ago opted not to go to the doctor because of the cost, said recently, he’s been able to capitalize on his HSA.
“I have a fake tooth and part of it broke off so I went to the dentist, and I went back to get a tooth cleaning and now I’m just going back to the dentist more regularly than I have been in years,” he said.
However, store co-owner Brad Fugate said he has reservations about the permanency of the solution. As insurance companies have made changes to their plans, he and his wife have had to change, too.
“So you set it in motion, but you’re always forced to push your deductible upward or give up some benefits in the plan. I’d like to think that this is a good thing from here on out but it is only for the moment.”
But, after years of being self-employed, for Brad and Sharon that’s business as usual.