On the heels of greater debit card use to pay for these specific expenses as a budgetary tool that complements payroll deduction, another trend unfolding in the employee benefits marketplace involves employers combining high-deductible plans with self-insurance to ease the sting of employees having to pay first-dollar coverage on their own.

Several leading players, including Blue Shield, Health Net, Kaiser Permanente and Anthem Blue Cross, have threatened to terminate contracts and gut commissions for brokers who sell so-called wrap-around packages, according to a recent report in the Sacramento Business Journal. They’re also pressuring employers to sign statements pledging not to combine such plans or risk losing coverage, concerned about the effect these actions could have on health plan utilization and profit margins.

And it’s no wonder: One particular estimate based on how these schemes would affect a 40-person business operating in the Golden State found potential savings as high as 40% compared with traditional coverage without skimping on benefits.

Chris Ohman, president and CEO of the California Association of Health Plans, was quoted as saying wrap-around plans “run the risk of destroying lower-premium health products by driving up the price or making them go away completely.”
Broker Mike Hoffman noted that his colleagues aren’t fans of wraparounds because the commissions associated with these plans are low to begin with, while fellow broker Chris Lazio favors the use of health savings accounts so that employees are forced to become smarter health care consumers.