Johnson and Johnson recently introduced a health care plan to most of its employees replacing a POS plan with an HRA (Health Reimbursement Plan). It is a special plan design and administrated by three insurance carriers. As a leader in the health care field this is again showing how a major company can introduce a plan which educates employees and gives them choice which are based on developing consumer awarness of medical cost and an opportunity to help reduce those costs.
'This is a major change "It's a whole new way for [employees] to think about the delivery of health services." In January, J&J replaced the point-of-service plan it had offered for the past 10 years to its 43,000 white-collar workers in the U.S., mainly located in New Jersey, Pennsylvania, Florida and California. Under the old plan, employees were responsible for a flat $15 copayment for physician office visits.
All of the other health benefit programs were eliminated by J&J, although employees in some parts of the country have the option of enrolling in an HMO. Sexton says that about 70% of the company's entire work force is enrolled in the new account-based plan. To ease the transition toward the new plan, J&J relied on a technique used to market its products to the public — brand extension. Since the company's health and wellness program is known as Healthy People, the new health plan is called Healthy People HRA — folding it into an already recognized entity.
Small employers can also avail themselves of these plans and offer them as an option to standard plans. One way of doing this is through employer contributions and incentives. Employees who become more aware of health maintance programs and develope an awarance of provider cost to help reduce eventual claims expense can achieve savings for both themselves and their employer.
As more and more larger companies develope HRA and HSA programs so smaller employer groups will follow suit as they see the opportunity to better provide benefits and control costs.
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