ith health-care costs soaring, something had to be done. So on January 1,
2002, Textron Inc. rolled out a consumer-driven health plan for 1,600 of its
36,000 U.S. workers. The multi-industry company, which is based in Providence,
Rhode Island, extended the offering to 25,000 active and retired employees on
January 1, 2003.
"Our employees and managers understood that it was prohibitively expensive
to continue to absorb double-digit increases in the cost of health care," says
George Metzger, vice president, human resources and benefits. "The typical
solutions of decreasing benefits and increasing employee premiums were simply
unacceptable. Our research eventually brought us to consumer-driven health care
as the `best-fit' solution."
Textron chose consumer-driven health care because "we believe that a
partnership between the company and our employees is the best way to slow rising
costs, while giving employees flexibility, financial incentives, and educational
support to help them make better-informed decisions about the type and quality
of the health care they elect," Metzger says.
Textron's consumer-driven plan provides an annual personal account of $1,000
for employee-only coverage, $1,500 for the employee plus one dependent, or
$2,000 for the employee plus two or more dependents. When the account is
exhausted, employees incur a deductible of $600, $900, or $1,200, depending on
the number of dependents covered. Once the annual deductible has been satisfied,
insurance kicks in with 100 percent coverage for in-network services and 70
percent for out-of-network services. Monthly premiums are $61 for an employee,
$114 for an employee plus one dependent, and $160 for an employee plus two or
more dependents. Unused personal account balances roll over to the next year.
To monitor and evaluate the effectiveness of the plan, "HR uses both
internal and external resources to provide extensive retrospective data
analysis, as well as predictive modeling," Metzger says. "This analysis will
enable us to forecast specific cost-drivers so that we can then develop focused
strategies to address utilization."
= Member Only
