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Company reinvests savings into critical care, accident policies for employees

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When LafargeHolcim U.S. moved to consumer-driven, high-deductible health plans last year for its employees, it spent $2 million of the cost savings on added benefits.

The company used a portion of the money to purchase on behalf of every employee and dependent enrolled in its health plans three new health care-related policies: a hospital indemnity policy, a critical illness policy and an accident policy, written by Aetna Inc. and Allstate Benefits, a unit of The Allstate Corp.

The coverage provides a cash benefit to offset a portion of expenses that fall under plan deductibles or coinsurance, said Philia Swam, LafargeHolcim's U.S. manager of health, wellness and group benefits in Chicago.

For example, if an employee is hospitalized, he or she is eligible for $1,000 to help offset the hospital bill from the hospital indemnity plan's insurer, Aetna.

The reason for adding the coverage was basic, Ms. Swam said.

“We know we made significant plan design changes. We know we are shifting a significant amount of costs to participants that they never have had before,” she said. “We want to be able to take some of that burden off employees by providing them with these policies that offer cash to cover expenses associated with particular medical situations.”

In addition, cash payments are offered for employees to have certain preventive services, which can save money for the company and employees, Ms. Swam said.

For example, a $400 cash benefit per family to apply to the cost of certain preventive medical, dental and/or vision services.

“It is our way of saying thank you for having a preventive care screening,” Ms. Swam said.

There is an additional bonus to offering the policies: reducing the likelihood that the health plan will trigger the Affordable Care Act's Cadillac tax, Ms. Swam said.

The 40% excise tax is to be imposed on the portion of group health plan premiums that exceed $10,200 for single coverage and $27,500 for family coverage, effective in 2020.

But the cost of voluntary plans, which include LafargeHolcim's hospital indemnity, critical illness and accident plans, are excluded when calculating the excise tax.

“These plans are separate from medical and are not used for Cadillac tax calculations,” Ms. Swam said.