Dan, I feel your pain my friend! We go through this every year. Yes, this option exists, and it's what we do, but it requires a lot of "strategic thinking" on the part of the company, since I've not yet met a broker who comes to us with the concept neatly tied up in a bow. My broker says every year how "creative" we are in offering options. Don't get me wrong - it's a lot more work for the broker too, but if you want, I'm happy to walk you through our thinking and how we got here. We have a $$ amount we allocate per employee per year, which if they are single, and don't need fancy programs, they can pocket the money in an HSA to grow tax free! If they have a family to cover, it can help offset those premiums. Drop me a line it you want, and good luck...Elizabeth

Elizabeth, great to see we're not the only ones thinking this way. It's just crazy that it's not easy to do what we want. I'll definitely give you a call to discuss in more detail.

Bobby thanks for the heads up. I'll definitely look for that article. if you come across it, please let me know.

Amazingly, this seems to be very hard to do. One would think there would already be a plan for an approach like this.

Thank you also for sharing what nirvana would be for you, and I agree health insurance can seem to be a complicated mess because it really is . There are elements of your ideal situation that can be accomplished, unfortunately health insurance specifically and benefits in general are quite costly. For employers with less than 50 employees the rates are based on an employee's age in increments of 10 years, i.e 20s, 30s, etc. Premiums go up as individuals get older. Premiums for an HSA eligible PPO plan for an employee in their 20s with a $3000 individual deductible are in excess of $200 per month (this is pretty much the least costly situation an employee can be enrolled). The costs increase pretty significantly for employees in higher age brackets and MUCH higher for employees enrolling with dependants. The biggest obstacle for the nirvana situation would be the $100 per month employer contribution as employees could be paying anywhere from 55% to 90% of the total medical cost and this does not include an employer HSA contribution, dental, vision, life insurance, disability...

The other potential issue is Health Insurance carriers require certain % participation to establish a group plan. Typically this is 75% of eligible employees. Employees enrolled in a spouse's plan do not count negatively towards participation; however, employees choosing not to enroll because they are enrolled in an individual plan can present a problem in terms of meeting participation. In general, employers that do contribute a larger portion of the employee only cost do not have issues meeting participation.

I VERY much agree with your ideas on having employees making a contribution so they have skin in the game and I am also a big fan of HDHP with HSAs. Of the over the 300+ VC backed companies our firm consults a very high percentage offer HSA qualified plans, and I have been a proponent of them since their inception in 2004.

Jed, thanks for your thoughts. You have a great reputation as an expert in the space, so I appreciate you taking the time to contribute. Since we're a small company, $100/mo is the best we can do now, but our goal is to increase that over time. I understand your point about costs being high for the employee with only a $100 contribution.

Question for you: Is it possible to provide an employee with pre-tax money (i.e., the $100/mo) and have *them* decide how to spend it? I.e., maybe they spend it on their personal insurance plan. Is that possible, without us actually providing health insurance per se? I.e., my thought is, what if as a start we just provide pre-tax money to the employee for them to use on any health-related costs as they see fit. (They could use it for health, vision, dental, etc.)

I guess I'm wondering if such a thing exists as a "pay money pre-tax" plan for health-related items.

We're still wrestling with this. One of our employees has this on her to-do list and is spending time every day evaluating options. Here's a note I just sent her about using an HSA -- does anyone have any experience just doing an HSA and not actually getting full-on health insurance until the company gets a bit bigger?

"Find out more about HSA's pre-tax. Can we as a company choose not to do healthcare yet, but instead pay $100 per employee pre-tax into an account that the employee can use. Find out what restrictions there are on HSA... is it any health plan that can be paid towards? Can it go towards glasses? Dental? What about long-term disability? 401k? Prescriptions? etc. Find out from our banks if that can be done through them, and then also talk to the brokers about doing it through them."