More in the package? As employers shift health-plan costs, many add optional benefits for employees.

• Author: Mayer, Kathy
• Position: Employee Benefits

WITH EMPLOYERS OPTING for higher-deductible, scaled-back health plans--and workers paying more of the premiums--what can make employee-benefit packages more attractive?

The answers, Indiana benefit providers say, are in consumer-driven health plans such as the new health-savings accounts as well as flexible-spending accounts; in employee-paid group plans such as life, disability, vision and dental coverage; in supplemental gap policies; even in health insurance for pets.

While none of these options can prevent rising health-insurance costs and declining health benefits, each offers some opportunity to enhance the benefits package.

"Employers are raising deductibles and raising the employee paid portion," says John Gause, president of Apex Benefits Group in Indianapolis. "About half the time they'll increase the employees' contributions. A lot of employers have moved toward asking employees to pay a percentage rather than a flat amount. Last year the average increase was 14 percent in premiums. There's merit to asking the employees to pay a percentage, so they understand."

And with that, he says, "They've got some skin in the game."

"Because of the high cost of health insurance, employers are having to re-look at benefits," says Lori Pittman, account executive in the employee benefits division of The Braman Agency LLC in Merrillville. "The co-pay is going up, prescription costs are going up and the deductible is going up. Employers feel they're taking away something. So by adding some additional benefits, it takes away some of the burden of the expense and benefit change."

Consumer-driven health options. What are collectively called consumer driven health plans are one approach. These plans include flexible-spending accounts and the newer health savings accounts (HSAs), an option established by Congress last year (see related story, page 16).

HSAs allow individuals to make pre-tax deposits in an account, which can also be funded by employers. The money can be used to pay for qualified health expenses, and any unused amount may be rolled over from year to year. Money withdrawn for health care is tax-tree; other withdrawals are taxed and a penalty assessed. If anything remains at age 65, it can be withdrawn with no penalty, but it is taxed.

"Health savings accounts are gaining a lot of velocity and interest," says Rick Maldonado, vice president of South Bend's Strategic Employee Benefit Services, which also has offices in Elkhart, Fort Wayne...