The "Buy-Down" is a term we use to define a partial self-funding arrangement an employer can use when providing a health insurance plan for employees. Provisions for the Buy-Down are found in Section 105 of the IRS code.

We've been using the Buy-Down for over 20 years. It has been proven to be very successful.

Every business owner who has used it has saved significant amounts of premiums every year...year after year. The average business owner saves 1 1/2 to 2 months premiums per year.

It is simple to establish.

All administration details are performed by Myriad Benefits& Alternatives.

It provides an extra resource for employees and their covered family members when the experience claims problems.

It provides the business owner a better understanding of claims paid and benefits used.

Typical Plan

ACME Company has a plan in effect with Regence BlueShield. It has a $500.00 deductible, an 80%/60% in and out-of-network co-insurance percentage with a $3,500.00 total out-of-pocket worst case (all claims out-of-network). The only supplement is the Rx card.

ACME's total monthly premium is $7,618.26. This is the amount sent to the carrier each and every month regardless of the number of claims. ACME pays the premium and Regence BlueShield takes all the risk.

Buy-Down Plan

The Buy-Down focuses on the deductible and the premium savings.

The Buy-Down plan with Regence BlueShield has a $3,000.00 deductible with a total out-of-pocket of $3,600 worst case (all claims out-of-network). It has the same prescription card, plus a $500 per year accident supplement.

The total premium for the Buy-Down plan for ACME would be $5,383.00, which is a difference in monthly premium of $2,235.23 or $26,823.12 per year. The annual savings of $26,823.12 is set aside.

Employees are provided a $500.00 deductible plan. After employee meets their deductible, 80% or 60% of the next $2,500 ($3,000 less $500) will be reimbursed to them by ACME. The reimbursement funds come from the annual premium savings of $26,823.12. ACME should save $13,000 or more by the end of the plan year.