Benefits balancing act: options to counteract rising health insurance premiums.

• Author: Sutherland, Spencer
• Position: Workforce: Staffing and Benefits

Utahns enjoy some of the lowest premiums for health insurance in the country, thanks to a young and healthy population. The state, however, is far from immune to the rising cost of healthcare. Over the past decade, premium rates have risen more than 9 percent each year to keep up with increased utilization and higher-priced medical procedures.

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Successful employers realize that a strong benefits package, including good health insurance coverage, is crucial to attracting and retaining high-quality workers. But with skyrocketing premiums, employers are on the lookout for ways to keep costs down without sacrificing quality.

Under a traditional group health insurance plan, the employer chooses the company's benefits, provider network, copays and deductibles. Generous benefits and lower deductibles, of course, result in a higher premium.

To counteract rising costs, employers have begun gravitating toward what is known as "consumer-driven healthcare plans," those that give purchasers more flexibility in how their healthcare dollars are spent.

HEALTH SAVINGS ACCOUNTS

Though annual rate hikes are the norm for most employers, "it's still shocking to them;' says Jared Balis, owner of Utah Insurance Advisors. "It's hard for them to swallow." As a broker, Balis' top priority is finding his clients the best insurance plan for their budget. As such, he says, "I always present an HSA as an option."

An HSA, or health savings account, is a tax-advantaged medical savings account. An employer, an employee--or both--can contribute pre-tax dollars to the account and then withdraw the funds to pay for medical services covered by the insurance plan. An HSA must be paired with a qualified high-deductible health plan (HDHP) and have a minimum deductible of $1,200 for an individual or $2,400 for a family.

According to the Balls, the biggest advantage of an HDHP is a lower premium, which could be significantly cheaper than a plan with a low deductible. Those savings can then be put into the HSA, which also earns interest tax-free. More importantly, the funds in the HSA roll over from year to year and belong to the employee, rather than the employer or insurance company.

Because the high deductible puts much of the upfront payment responsibility on the employee, an HDHP makes the most sense for those who are generally healthy. "The HSA allows individuals to sock away the money and use it when they really need it, rather than definitely giving it...