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HAP Adds Consumer-Driven Products to Portfolio; Products Control Employer Health Care Costs; Gives Employees Tax-Free Savings Vehicle

Posted on: Monday, 6 December 2004, 15:00 CST

Health Alliance Plan (HAP) announced today it is offering consumer-driven health plans -- high-deductible health plans with fully integrated Health Savings Accounts (HSAs). HAP's consumer-driven health plans combine health coverage with tax-free Health Savings Accounts and 100% first-dollar preventive services coverage. Web-based support tools will assist members in becoming successful health care consumers.

Consumer-driven plans give consumers more choices and greater control over routine health care decisions, and a greater stake in their health care spending. Employees have access to HAP's entire provider network without restrictions. They also have access to HSAs set up annually by the employee or the employer, depending on the plan, to spend at their own discretion on medical care.

Employers can customize the CDHP with first-dollar accounts and features that are seamlessly integrated with the consumer-driven plan, such as:

-- Health Savings Accounts

-- Health Reimbursement Accounts (HRAs)

-- Health Incentives

Preventive services, such as physical exams, mammograms, immunizations and well-child visits are encouraged; HAP offers first-dollar 100% coverage for these services. Employees won't have to dip into their health savings or health reimbursement accounts to pay for preventive services and they won't count against the employees' deductible.

Consumer-driven health plans are one of many health plans and benefit designs HAP offers to give employers the cost and benefits coverage flexibility they need. Employer groups can incorporate the consumer-driven health plans into their menu of other HAP Preferred and Alliance Health and Life coverage options, making HAP a total replacement carrier. The new products are available as self-funded or fully insured programs.

"HAP developed these consumer choice products for employers who are searching for alternative products that can reduce their health insurance premiums through deductibles, without sacrificing valued preventive services," said Jon Clement, HAP vice president of Finance. "Consumer driven health plans are an important addition to HAP's product line-up. We have products to meet every employers' needs - our flagship HMO, PPOs, experience-rated, fully insured and self-funded products, and now consumer-driven health plans.

"The concept of consumer-driven health plans is simple: return control of health care dollars to the people who use them - consumers," said Clement. "These plans motivate employees to make cost-conscious choices because they're directly involved in selecting and purchasing health care services."

The HSA option enables employees to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis, similar to a 401(k) plan. Key advantages of the HSA include:

-- Used to cover employees' out-of-pocket expenses.

-- Income earned grows tax-deferred.

-- Unused balances carry over each year.

-- Entirely portable; employees keep their balance if they change jobs, switch health plans or retire.

HAP's consumer-driven health plans offer customizable deductibles, coinsurance, co-payments and out-of-pocket limits, while giving employees the peace of mind of traditional coverage. Once the employee has exhausted the first dollar account and met a deductible (determined by employer), traditional insurance kicks in, offering coverage for additional medical expenses. HSAs are subject to federal government regulations; employers must meet certain guidelines regarding minimum deductibles ($1,000 for individual; $2,000 for family) and maximum out-of-pocket limits.

HAP will partner with Lumenos, a pioneer in the consumer-driven health care industry, and Mellon HR Solutions LLC. HAP selected Lumenos due to its expertise in administering consumer-driven health plans, as well as for its Web-based support tools, customer service and employee communication support. HAP's arrangement with Mellon will enable the company to offer HSAs for any qualifying high deductible HAP product, such as Value Plus.

About HAP

Headquartered in Detroit, HAP is a nonprofit health plan serving more than 529,000 members and 2,800 employer groups. HAP is a subsidiary of the Henry Ford Health System, one of the nation's leading regional health care systems. The National Committee for Quality Assurance awarded HAP's Commercial HMO its highest status, Excellent Accreditation, and Full Accreditation for Alliance Health and Life Insurance Company PPO products. General Motors designated HAP's Commercial HMO a "Benchmark HMO" for providing high quality service and value.

About Lumenos

Lumenos, based in Alexandria, Virginia, is an award-winning, industry leader in the field of consumer-driven health care. The company's mission is to engage consumers in their health care by giving them control of routine health decisions and dollars, along with the decision support tools to make informed decisions about their care.

About Mellon Financial Corporation

Headquartered in Pittsburgh, Mellon is one of the world's leading providers of financial services for institutions, corporations and high net worth individuals, providing institutional asset management, mutual funds, private wealth management, asset servicing, human resources and investor solutions, and treasury services. Mellon has more than $3.7 trillion in assets under management, administration or custody, including $670 billion under management. Its asset management companies include The Dreyfus Corporation and U.K.-based Newton Investment Management Limited. News and other information about Mellon is available at www.mellon.com.

Source: Business Wire

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