By Sarah Skidmore, The Florida Times-Union, Jacksonville Knight Ridder/Tribune Business News
Sep. 20--Aetna Inc. announced a new health insurance product yesterday that it will offer to employers in 2002. The Aetna HealthFund is a blend of the services of a standard health plan and the payment methods of a health savings account.
The product, which is aimed at self-insured employers with 300 to 3,000 employees, allows employers to spend a fixed amount for the year on employee health benefits. The Hartford, Conn.-based company is the first insurer to offer this type of policy on a national basis.
The HealthFund will offer the services of a preferred provider organization, often known as a PPO. But the uniqueness of the plan is the payment method. Under the plan, an employer sets up a health savings account to cover health care costs, including PPO deductibles.
PPOs are one type of typical managed care benefit plans that most employers offer employees. In a PPO, or preferred provider organization, members get a discounted price for going to a physician in a predetermined group of physicians, but they can go to providers outside the network at a higher price.
The amount of coverage and cost of HealthFund depends on the system set up between Aetna and the employer.
Aetna expects annual PPO deductibles to range from $1,500 to $3,000 and the employer-funded health savings accounts to range from $500 to $1,000. Some companies may choose to add a flexible spending account so employees can put pre-tax dollars aside to pay for the health costs that exceed the balance of their employer-sponsored health savings account or to pay for a supplemental insurance. The funds in the employer-sponsored account do not roll over from year to year, but funds in the employee account can.
'This is a very customized product,' said Marlene Baltar, spokeswoman for Aetna.
While this is the first national launch of such a product by a major health insurer, there have been several experiments with similar projects recently on a regional or smaller basis.
The idea of offering more choice to clients while also shifting some spending responsibility onto employees is responsive to several trends in health care coverage.
Steven Wojcik, director of public policy for the Washington Business Group on Health, said employers and employees are increasingly looking for choice and say in their health benefits.
'These types of products are definitely being explored,' Wojcik said. 'What companies have to ask themselves is 'How do the costs of people who choose that product compare to those who choose a traditional plan?' '
As frustrations mount with the cost and access in typical health benefit plans, Wojcik said, employers and employees are more open to other options. But because this plan and others of similar nature are still new to large employers, their effectiveness should be regularly evaluated.
The Aetna plan is intended to be another option to offer along with traditional health benefit products, not as a replacement plan, Aetna said.
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(c) 2001, The Florida Times-Union, Jacksonville, Fla. Distributed by Knight Ridder/Tribune Business News.
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