Medigap for the Rest of Us

What Is Group “GAP” Insurance?

Group Supplemental Health plans called “GAP” plans are used to fill in holes in high deductible health plans HDHPs now being offered to workers today.  They are similar to the “Medigap” supplemental insurance plans millions of Seniors purchase each year to fill in holes in Medicare parts A&B.

These plans are considered “excepted benefits” under ACA meaning that they operate outside many of the rules of Obamacare.  They are offered only as supplements to existing major medical plans and only cover certain inpatient and outpatient deductibles and coinsurance costs.

Most GAP plans do not cover the professional fee in a doctor’s office nor outpatient prescription drugs.  Because of this, Advisors generally recommend Employers purchase at least a Bronze major medical plan with doctors office and prescription copays to complement any GAP plan.

Group Supplemental GAP Plans

Premium Saver Plans

Types of GAP Insurance

“1st Dollar” GAP

This GAP format offers 1st dollar benefits coverage for both inpatient and outpatient deductible and coinsurance costs.  Generally, Advisors design this format to cover up to $6500 inpatient benefits and between $2500 and $4000 of outpatient services.

In order to make 1st dollar GAP affordable, it is almost always age rated, and generally excludes certain services.  Mental illness and substance abuse are generally excluded.

Bottom line:  With 1st dollar GAP, Employees are provided full inpatient benefits.  They can also be covered on most outpatient benefits up to $4000 but are still responsible for remaining outpatient deductibles.  When paired with a Bronze plan, Employers can save money and employees can get 1st  dollar rich benefits they haven’t seen in years.

“Upfront Deductible” GAP

This GAP strategy is based on the HRA model:  Employers buy a high deductible plan (generally Bronze + Doctors OV and RX copay plans) then provide some, but not full deductible and coinsurance GAP coverage.  Example:  Employer provides a $6500 deductible major medical plan  plus $5000 Upfront Deductible GAP.  Employee pays a $1500 deductible then GAP covers the remaining $5000 deductible.

Bottom Line:  Employers save money by using a Bronze plan plus offering several upfront deductible GAP options for employees to pick and purchase.

GAP Strategies

“Insured HRA” strategy-save money and duplicate or improve existing coverage.

Combining a Bronze plan with GAP plan(s) can offer savings and even offer employees better coverages.

Cadillac Tax strategy- ACA Bronze plan base coverage, then allow employees to “pick and purchase” the right amount of GAP coverage.

“Private Exchange” strategy.  One Bronze plan base plan with multiple “buy up” GAP options.

Instead of offering several major medical plans, simply give employees a strong network PPO Bronze plan and offer them several GAP plan options to “pick and purchase” the levels of GAP coverage they desire.

Chelten Consulting represents the following GAP carriers:

  • Morgan White Group
  • Beazley Insurance
  • Opti-Med
  • American Public Life
  • Solutions Plus
  • Nationwide
  • Pre-Med Defender
  • SIS
  • Kemper
  • Washington National
  • Crescent

Call Chelten Consulting today at 248-464-6544 to discuss your needs, be they prospecting, marketing, selling or communicating benefits.  Let us create the perfect GAP strategy for you: Bronze + GAP = Happy Employers and Employees