Best Practices in HSA Acceptance, Adoption, and Success

 

Health savings accounts (HSAs), as a key component of consumer-directed health care plans (CDHPs), are an idea whose time has almost come. As the health insurance counterpart of the retirement plan IRA, these tax-advantaged accounts were expected to quickly become the option of choice. While that has not yet occurred, usage is growing. In fact, HSA adoption rates exceed those for HMOs when they were first introduced in the 1970s with 3.2 million Americans currently enrolled in such consumer-directed programs. A lag time in the acceptance of new ideas is typical. However, there are methods that have proven successful in decreasing reluctance and increasing adoption of HSAs.

With premium increases steadily exceeding cost-of-living and salary increases, gaining more widespread acceptance of money-saving health care options is crucial for U.S. companies in order to maintain profitability and global competitiveness. Health care costs represent more than 15% of the country’s gross domestic product and therefore also exert sizable influence on our economic outlook. A recent study by Aon Consulting Worldwide, the consulting organization of Aon Corporation, and the International Society of Certified Employee Benefit Specialists shows that a company can achieve first-year savings of 8% of premiums by implementing an effective consumer-directed health care strategy. The question is: What constitutes “effective?” Studying companies who have experienced success in the promotion of HSAs provides clues to common characteristics of programs that have exceeded the 2% of employees who typically choose a consumer-directed plan.

 

Choice
When HSAs are offered as the sole alternative to traditional plans, enrollment increases. Conversely, employers who offer more than three options see decidedly fewer employees choosing consumer-directed health care. As is the case with several of the characteristics of successful HSA plans, more is not necessarily better. In addition, increasing the number of plan options creates more internal administrative duties for HR personnel adding another level of financial burden for companies already struggling to pay for appropriate levels of health care coverage.

Support
The Kaiser Family Foundation reports that employees currently in consumer-directed plans often report lower satisfaction, most likely due to confusion about how the plans work. A survey published by the Towers Perrin employee-benefits firm found that employees with plans such as HSAs felt less capable of finding a good doctor or
hospital than their colleagues in traditional plans. Ironically, these employees were often in the same network with access to exactly the same care. Helping employees shop for health care supports their decision to choose—and their satisfaction with—HSAs. People think they can call the doctor and ask about the cost of an MRI. They are flabbergasted to learn the doctor generally has no idea. Being a good consumer means being able to make informed comparisons. Currently, some providers are offering online systems that compare local and regional cost and outcome data. Educating employees on using these systems and providing more information helps create better health care buyers. According to the 2006 “HRA/HSA Survey for Consumer-Directed Health Care Plans,” companies that “strongly support” their consumer-directed plans experience a 17% participation rate versus a 2% rate for companies that were neutral or showed low or moderate levels of support.

Wellness
Because HSAs are of most benefit to employees with the fewest health problems, successful programs—and conscientious employers—must incorporate a wellness component. Promoting an internal culture of wellness through health fairs, gym memberships, smoking cessation programs, weight control programs, and screenings makes financial sense for both employer and employee.  Read more >>