Optima Design Coupled with a Health Reimbursement Arrangement (HRA)
Virginia Beach, VA– March 3, 2009 – Optima Health launches Optima Design coupled with a Health Reimbursement Arrangement (HRA) as a new integrated product in its suite of Consumer Directed Health Plans (CHDPs). The plans are being sold starting March 1, 2009 with an effective date of April 1, 2009. What differentiates Optima Design from other plans with HRAs is that it is completely integrated and offers an employer flexibility to design the plans that best meet their employee benefits strategy.
“We feel the time is right for this product and employers will embrace our approach to managing healthcare costs during these difficult economic times,” comments John DeGruttola, senior vice president for sales and marketing at Optima Health. According to DeGruttola, the new product will help employers reduce the cost of providing health coverage and may help employers better control cash flow.
Key benefits that Optima Design HRA offers to employers are its simplicity of a fully integrated health plan and HRA funding option combined with the flexibility employers need to design the HRA to achieve their goals. It offers a long-term solution to better manage healthcare costs; employers determines the financial promise to pay amount and those out-of-pocket expenses to be covered; choice of eight core benefit plans which incents employees to manage their healthcare dollars; and lower premiums and lower future increases in premiums.
According to a national survey of employers (The Kaiser Family Foundation and Health Research & Educational Trust 2008 Summary of Findings), employer-sponsored insurance is the leading source of health insurance, covering about 158 million people in America. From 1999 until 2008, employers incurred a 119% increase in premiums while employees incurred a 117% increase in premiums. Additionally, there is an increase in the number of employers who are offering high deductible health plans with a savings option, such as HRAs or HSAs.
In early 2008, Optima Health introduced its first installment in CDHPs, Optima Equity, which are IRS qualified high deductible health plans designed to be coupled with a Health Savings Account (HSA). An HSA and an HRA have similar features, but differ in how funds are contributed and used for healthcare expenses.
Consumer Directed Health Plans
CDHPs are plans in which employers choose the insurance carrier and may provide a subsidy, as a financial incentive for employees to make smart decisions about their healthcare. Funding options can include a Health Savings Account (HSA), a Health Reimbursement Arrangement (HRA) or a Flexible Spending Account (FSA).
How HSAs and HRAs Differ
HSAs offer consumers a way to set aside funds for future healthcare needs and for retirement, much like a savings account. These accounts are tax-free, controlled by the consumer and separate from the health plan. On the other hand, HRAs are controlled by the employer and are a promise to pay arrangement in that employers make a financial commitment to cover certain qualified out-of-pocket expenses in order to offset healthcare expenses for their employees. However, with an HRA, the employer controls the way the arrangement is funded, how much is contributed and it remains their property if the employee leaves the company. HSAs and HRAs are always coupled with high deductible health plans as they are designed as an alternative to traditional comprehensive health insurance.
Optima’s Administrative Partners
Optima Health has partnered with Choice Care Card™ to administer the Health Reimbursement Arrangement component of its new Optima Design plans. Choice Care Card™ is an eight year veteran of HRA administration. Their operational strengths and flexibility will simplify the customer experience, making for a seamless transition from product to service.
For its HSA product, Optima partnered with HealthEquity®, Inc., a personal healthcare financial services company that provides health insurers, benefits administrators, employers, and financial institutions with an integrated Health Savings Account, claims payment system, and population-based service platform.
For more information about Optima Health’s suite of CDHPs, visit our Web site at www.optimahealth.com/cdhp.
About Optima Health
Optima Health provides health insurance coverage to more than 380,000 members throughout Virginia. With more than 20 years of experience in the health insurance arena, Optima offers a suite of commercial products including consumer-directed, employee-owned and employer-sponsored plans, individual and family health plans, employee assistance programs and plans serving Medicare and Medicaid enrollees. Our provider network features 15,000 providers including specialists, primary care physicians and hospitals across Virginia. Optima offers programs to support members with chronic illnesses, customized wellness programs, and integrated clinical and behavioral health services as well as pharmacy management – all to help our members improve their health. Our goal is to provide better health, to be easy to use and offer services that are a great value. To learn more about Optima Health, visit www.optimahealth.com.