Steps For Establishing An Effective MSA Program
Step Two: Setting Goals and Objectives

Once the nature, source, relationships, and level of health benefits and services costs are identified, the employer is prepared to establish goals for future health benefits costs.

Goal setting can not be done in a vacuum. Working with the employer's staff and/or broker, review current health cost levels, and the characteristics of the group, so everyone understands the data prior to setting targets. Healthcare and benefits cost targets will be established along with the steps necessary to achieve the targets. This will include a review of existing employer/employee contracts and other arrangements.

One implicit goal is to establish a target for employer's separate and aggregate cost of health and retirement benefits as a percentage of payroll or gross compensation. The plan objective will leverage the savings in health care costs to improve the financial well-being of employees by transferring savings preferably to retirement or other investment vehicles. Transferring the savings directly into taxable cash income may be equally as important to employees.

Some employees will likely have unremitting chronic medical problems and large expenditures from year to year. They will rarely have funds remaining in their MSA accounts. However, the benefit structure unique to MSA programs may prove a better value to that employee than alternate plans. MSA programs are structured so that out-of-pocket exposure is limited for every employee.

"Once the nature, source, relationships, and level of health benefits and services costs are identified, the employer is prepared to establish goals for future health benefits costs."

Employers should not expect immediate cost reduction the first year their employees enroll in MSA programs. However, employers can better control the rate of health benefits growth. They can direct newly identified excess funds to employees rather than to intermediaries and the health care industry. Some employers are finding first and second year savings with MSA programs, in addition to employees' saving. It is possible that employers might see their costs for health insurance reduced by 12 to 15% the first year of MSA participation.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org