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Los Alamos National Laboratory has made the decision to move from an Exclusive Provider Organization (EPO) health insurance plan to Preferred Provider Organization (PPO) and High Deductible Health Plan (HDHP) options this year.
Faced with rising healthcare costs, LANL rejected options other employers are taking, such as increasing the employees’ share of premiums, changing providers or going to a single plan such as the high deductible plan Sandia National Laboratories adopted.
“What the lab decided to do was put the focus on a healthier workforce and more responsibility on us as consumers,” C.J. Bacino said.
Employees must choose between the PPO plan and HDHP options.
“The PPO is actually more robust (than the current EPO plan) because it will allow you to go out-of-network. It costs more money to go out-of-network, but there is still coverage,” Bacino, of the Human Resources Division said during one of the meetings explaining new plan options.
The PPO plan comes with an 11 percent increase in premiums, as opposed to the eight percent increase the EPO plan would have been subject to. Those choosing the HDHP plan will see premiums decrease by 19 percent.
Employee share of premiums continue to be 20 percent for the PPO plan. HDHP plans offer a 15/85 split on premiums.
With the PPO plan, premiums are higher but deductibles are only $300 for an individual and $900 per family ($300 each for a family of three).
The HDHP plan has lower premiums but a deductible of $1,500 for an individual and $3,000 for a family. With the HDHP plan, the entire deductible can be met by one individual or a combination of individuals, rather than each person having to meet the deductible.
The HDHP plan also has lower yearly out-of-pocket maximums for families: $6,000 as opposed to $9,000 for the PPO. The individual maximum is $3,000 in both plans.
For the PPO, co-pays and prescription drug costs do not count toward the deductible; with the HDHP they do.
Both plans offer free preventative care.
The other major difference comes with Flexible Spending Accounts, available with the PPO, and Healthcare Reimbursement Accounts, partnered with the high deductible plan. IRS regulations determine which options are available with each plan.
FSAs must be used by the end of the year and cannot accrue interest.
The HSAs can accrue from year-to-year, and even be carried into retirement or to another job. They can be invested to accrue interest.
The lab is offering a one-time transition contribution to the HSAs of $250 for an individual and $750 for a family plan, to help employees meet deductibles before they have accrued a significant amount in their account.
Dental, vision, legal, life and disability benefits remain unchanged.
Those with few medical costs who wish to save on premiums may find the HDHP more palatable, but will have to be prepared to pay everything out of pocket until the deductible is met. Families with extremely high medical bills may also find the HDHP a better fit due to the lower out-of-pocket maximum.
Those with higher (but not catastrophic) medical bills will likely do best with the PPO option.
The lab is encouraging employee involvement in keeping cost low by using a new estimator tool Blue Cross/Blue Shield will launch in January that allows participants to compare the cost of services from different providers.
“Especially if you are in the PPO plan, you may wonder why you should be concerned about this, since what you pay is the same regardless of who performs the service,” Bacino said. “But this is the type of thing that left unchecked increases the price of co-pays and deductibles. So you still have the responsibility to know what those things are costing. We have to be knowledgeable about what things cost.”
The other step toward lowering costs is a new wellness program.
“In January, you are going to see the launch of a very large and very robust wellness program,” Bacino said. “There will be a central website where we can all go, and there will be these activities to do and there will be information and resources. And also we will each have our own individual website where we can go to see our individual stats and how we’re doing and what’s going on.
“It’s going to be very gamefied. It’s meant to be fun and engaging, with lots of games and challenges. And you can challenge your friends or groups can challenge other groups. Sandia has the same program and we’re hoping we can challenge them to competitions.”
Everyone signing up for the program will be issued a pedometer with a USB cable that can download information directly into their computer.
LANL is offering incentives for participation. Employees can accumulate points that will translate into credits to help pay for healthcare the following year.
Participants who fill out a healthcare assessment questionnaire will receive a $100 deductible credit for the PPO plan and a $250 deposit in their HAS for those in the HDHP plan.
“The final message here is not just about different plans, but a philosophical change here, a whole new emphasis on health and wellness and preventative care and consumer responsibility,” Bacino said. “This is really more about all of us together, really understanding that what we do not only impacts our health but impacts our costs. And not just our costs, but everybody’s costs as well.