Vision Correction Surgery Benefits Going Mainstream
This year, an estimated 1 to 1.5 million people will get the procedure.That's only a drop in the bucket of the more than 100 times that many Americanswho wear contacts or glasses. The procedure, which was approved by the FDA in1995, was first thought of as uncovered elective surgery, like cosmetic surgery.
Now, employers and insurers are realizing what huge demand there is, and areworking on incorporating it into benefits plans.
For one thing, it gives them a staffing advantage over competitors."This is a heck of a recruitment and retention tool," says BillGurzi, marketing director for Work/Life Benefits, a Lakewood, CA-basedconsulting company.
Secondly, it meshes with the business results of the organization. If youremployees are firefighters, astronomers, or surgeons, helping them see bettermay be money well spent.
Among the options for employers wishing to offer the benefit:
Discounts on surgery
A few years back, surgery could cost as much as $6,000 for both eyes, andthose insurers who were cutting deals with employers were offering significantdiscounts to employees.
The employer gets a usually free opportunity to offer something new toemployees. The insurance company or vision plan gets a chance to market to thecompanies' employees -- a much more targeted form of advertising than commercialsand such.
Now, however, the price of surgery has gone way down, to sometimes as low as$1000 for both eyes. Discounts have gotten smaller, or non-existent, in somecases.
When discounts are offered, it's often at a 15-25% discount. VSP, forexample, which is the nation's largest provider of eye-care coverage, struck adeal with CIGNA earlier this year to offer CIGNA participants 20-25 percentdiscounts. Patients must go to certain doctors and laser centers to receive thediscount.
Shelly Weber, work/life manager at Ericsson Inc., in Dallas, Texas, saidEricsson looked into offering the benefit after receiving requests for thebenefit from employees. Ericsson partnered with The Laser Center and is offeringa $600 discount per eye to all employees and their extended families. The LaserCenter isn't the cheapest place to get the procedure done, but Weber says"I'm trying to get them to lower their price."
The employer usually doesn't pay anything to offer a discount. In cases wherethey do (e.g. self-insurance), it can be unexpectedly costly. Mitch Bramstaedt,a Chicago, Illinois-based health care consultant for The Segal Company, saysthat "there are instances where the first-year costs are much higher thanwas expected because of the pent-up demand. As a result, vision correctionsurgery can be a very expensive benefit."
Flexible spending accounts
These are IRS-approved accounts into which employees can withhold a certainamount of their paychecks into a tax-free account. Employees can then tap intothat money to pay various out-of-pocket medical expenses.
This year, the IRS updated their regulations to specifically state that it'sOK to use a flexible spending account for laser eye surgery.
Let's say an employee sets aside $3,000 during the year for laser eyesurgery, and they live and pay taxes in California. If they're in the 28%federal income tax bracket and 7% California tax bracket, they save $1,280 forthe year (they avoided 28% federal + 7% state + 7.65% FICA taxes). It's acheaper way of paying for surgery than by handing the ophthalmologist $3,000 incash.
As an option in high-end health plans
Employers who want employees to have the laser-surgery option in their healthplans can offer a Cadillac plan during enrollment season.
Employees can thus choose to pick that more-expensive plan -- sometimes aspart of a vision plan, sometimes as part of a general health plan -- and get thelion's share of their laser surgery expenses taken care of.
The deputy sheriff's association in California, for example, uses BlueCross's HMOs and PPOs. If sheriffs choose the high-end Blue Cross PPO, he or shecould have laser vision surgery entirely or almost entirely paid for as part of theirmedical plan. The plan provides $1,500 per eye toward the surgery.
Education and safety
Employers planning on offering the benefit should consider a certain amountof education on the safety of the procedure.
"Employers have to explain to their employees the risks involved,"says Lita Weinstein, director of employee benefits for the 10,000-employeeDenver Public Schools.
The school system has offered a discount for about two years. Weinstein saysher organization partners with a laser center to send brochures out about theprocedure, and invites the laser center to open-enrollment meetings in order to educateemployees.