Is HSA growth rate stuck in neu­tral?

EBRI anal­y­sis of five sur­veys show en­roll­ment trend­ing down over the past decade, but bullish signs per­sist.

Employee Benefit News - - CONTENTS - By Bruce Shutan

Growth rates in health sav­ings ac­count-el­i­gi­ble health plan en­roll­ment have been trend­ing down from as high as nearly 70% a decade ago to no more than 12% and as lit­tle as 0% last year. That’s the star­tling con­clu­sion of a re­cent Em­ployee Ben­e­fit Re­search In­sti­tute anal­y­sis of five sep­a­rate HSA sur­veys. In ad­di­tion, EBRI found that many HSAs are un­funded and a grow­ing num­ber are not re­ceiv­ing em­ployer or em­ployee con­tri­bu­tions. Re­searchers ex­am­ined data from the EBRI/Green­wald & As­so­ciates Con­sumer En­gage­ment in Health Care Sur­vey, Amer­ica’s Health In­sur­ance Plans, Kaiser Fam­ily Foun­da­tion, Mer­cer and the National Cen­ter for Health Sta­tis­tics. While these find­ings may alarm law­mak­ers and reg­u­la­tors, they also are bound to shape em­ployer strate­gies about lever­ag­ing pre­tax dol­lars to ease the sting of ris­ing out-of-pocket costs. But HSAs pro­po­nents say flat en­roll­ment is only part of the story, and they’re bullish about the prospects for growth. “We grew 18% year-over-year in terms of the num­ber of ac­counts, which was pretty solid growth,” re­ports Chad Wilkins, EVP of Web­ster Bank and head of HSA Bank, not­ing pen­e­tra­tion rates of be­tween 20% and 30% of com­mer­cially in­sured pop­u­la­tions. New peo­ple are still en­rolling in HSA plans, ex­plains Paul Fron­stin, direc­tor of EBRI’s Health Re­search and Ed­u­ca­tion Pro­gram, but there’s nearly no growth in the to­tal size of that mar­ket­place. The is­sue is that many work­ing Amer­i­cans are leav­ing these types of plans af­ter chang­ing jobs or dis­cov­er­ing that they’re just not the right fit, he says, cit­ing those with chronic con­di­tions or high uses of some health­care ser­vices. Most em­ploy­ees use HSAs for re­im­burse­ment of out-of-pocket health­care ex­penses and not as an in­vest­ment ac­count, Fron­stin adds. One rea­son is the longer some­one is in an HSA, the more likely they are to in­vest. But most en­rollees haven’t had their ac­counts that long, ac­cord­ing to Fron­stin, who es­ti­mates that 25% of em­ployee pop­u­la­tions are in an HSA-el­i­gi­ble plan. Only about 1% of HSAs opened in 2016 were in­vested in se­cu­ri­ties, he says, whereas that num­ber is 10% or 12% for ac­counts opened in 2005. In ad­di­tion, just 13% of ac­count hold­ers max out their con­tri­bu­tions. Two pos­si­ble ex­pla­na­tions for the dearth of HSA in­vest­ments are that peo­ple don’t nec­es­sar­ily know an in­vest­ment op­tion is avail­able or they don’t meet the min­i­mum-bal­ance re­quire­ment to in­vest, Fron­stin says. Another rea­son may be a re­luc­tance to tie up money un­til the ac­count holder has reached a cer­tain bal­ance over time, he adds. There could be yet another driver of the re­sults EBRI has un­cov­ered, ob­serves Keith McNeil, co-founder of Ar­row Ben­e­fits Group. “An im­prov­ing econ­omy might ac­tu­ally cause a slow­down in the growth of high-de­ductible health plans,” he says. Em­ploy­ees who once could only af­ford an HSA-com­pat­i­ble plan with­out an HSA con­tri­bu­tion might now af­ford a low de­ductible plan, which he says would be viewed as be­ing more gen­er­ous and not a take­away. But there also are sys­temic prob­lems that need to be re­solved at the fed­eral level, ex­plains Mark Fen­drick, co-founder and direc­tor of the Univer­sity of Michi­gan Cen­ter for Value-Based In­sur­ance De­sign Cen­ter. “Ev­ery CFO of a large and small or­ga­ni­za­tion wants to move to an HSA-qual­i­fied HDHP,” he says, cit­ing the sav­ings to em­ploy­ers. How­ever, ob­sta­cles re­main. They in­clude short­com­ings in ben­e­fit de­signs and IRS rules. One pos­i­tive de­vel­op­ment is that Health and Hu­man Ser­vices Sec­re­tary Alex Azar wants to im­prove health plan choice and in­crease ac­cess to ev­i­dence-based ser­vices for chronic con­di­tions by re­mov­ing reg­u­la­tory hur­dles, Fen­drick adds. Mar­ket­place in­no­va­tion also is ex­pected to play a role. HSA Bank’s on­line cal­cu­la­tor, for in­stance, al­lows in­di­vid­u­als to model a to­tal-cost sce­nario by en­ter­ing their med­i­cal ex­penses, health plan costs and HSA con­tri­bu­tions. Wilkins says the tool paves the way for a trans­par­ent price com­par­i­son rel­a­tive to tra­di­tional PPO cover­age or another plan op­tion. Adds Kevin Robert­son, chief rev­enue of­fi­cer at HSA Bank: EBRI’s anal­y­sis rec­og­nizes that the re­search it ex­trap­o­lated in­volves sam­ple stud­ies, “and while they’re ab­so­lutely good from a di­rec­tional stand­point, the re­al­ity isn’t that weak.” Even the trends re­ported in EBRI’s own data as well as oth­ers, show that de­spite flat en­roll­ment, he says the in­dus­try has been grow­ing at dou­ble dig­its all along.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.