Gap plans are tantalizingly named. In a time when healthcare costs always seem to be rising, and revenues can’t quite keep up, many employers find it challenging to offer high-quality healthcare coverage that they and their employees can afford. Deductibles and out of pocket expenses are going up every year, and companies like the sound of something that can help “fill the gap” between what they once had and what they currently can offer.
Gap plans are an option many are considering. Instead of an employer covering employee out-of-pocket expenses under something like an HRA, these plans act as an additional layer of insurance that allows employees to be reimbursed for out-of-pocket expenses. But like any healthcare solution, gap plans are only right for certain employers. Is your company one of them?
The key to determining whether or not a gap plan is a good product for a particular company is to examine how it fits with existing coverage. Gaps plans vary widely, and often won’t cover deductibles on common claims such as doctor visits and prescriptions. Typically, the plans only cover inpatient and outpatient procedures, and occasionally diagnostic tests like labs and x-rays.
As with any health insurance product, it’s also important to check the fine print. This is particularly true with gap plans, as many include limitations on benefits. It’s not unheard of for these plans to have other restrictions, such as only providing coverage for in-hospital care.
But companies should not be warded off by these considerations. Gap plans can be a good fit for certain employers, particularly those that aren’t quite large enough to self-insure. For example, gap plans that only reimburse expenses incurred during hospitalizations may actually be a great product for companies with primary insurance plans that have high emergency room deductibles.
For this reason, Creative Benefits believes highly in comparing gap plans from various carriers and weighing them against other reimbursement-type arrangements when finding solutions for our clients. We’ve seen many occasions where gap plans have provided an important piece of the benefits puzzle.
If you think a gap plan or similar product might be beneficial to your company, the expert analysis that our firm provides could provide the strategy to ensure your success.
About the author: Macee Keelan is Vice President of Creative Benefits, Inc. She has been with the company for more than 11 years and specializes in benefits administration.