January 26, 2014


HSAs drive greater employee health engagement (Michelle Hicks, January 24,2014, Idaho Business Review)

On Dec. 8, 2003, President George W. Bush signed the Medicare Modernization Act into law, which included not only the expansion of Medicare Part D for prescription drugs, but also the introduction of health savings accounts. Ten years later, Americans have almost $20 billion dollars invested in more than 9 million accounts, designed to help pay for eligible medical expenses when used with a high-deductible health plan.

Their appeal is growing. One in four employers in 2013 said they are increasing their emphasis on high-deductible health plans with HSAs, according to the International Foundation of Employee Benefit Plans. Part of what makes them attractive to employers is that HSAs can help reduce employer health care expenses. A study by the Employee Benefit Research Institute found total health care spending for an employer with a high-deductible plan and HSA fell by 25 percent in the first year. But that's not the only draw.

Employers are, of course, concerned with how much they spend on health care, but most offer it to ensure their workforce is healthy and productive. The old models of providing health plans with $10 co-pays to visit the doctor or fill a prescription don't reflect the true health care cost to employees, making them less likely to pay attention to their health or their health care spending. When they have "skin in the game" through a plan that requires them to meet a higher deductible before their benefits kick in, studies now show employees pay more attention to not only spending, but their overall health.

A recent study by Buck Consultants found employees who contribute to health savings accounts generally become more engaged in managing their health after enrolling. Fifty-one percent of respondents are setting aside more money for potential health care costs than before they had HSAs, and 29 percent have more discussions with their doctors about the cost of care.

The Rise of Consumerism : Recent research reveals employees with health savings accounts are slowly becoming better consumers when it comes to buying medical care. Here's what HR can do to ride that wave to a healthier workforce. (Tom Starner, December 30, 2013, Human Resource Executive Online)

The health savings account and high-deductible, consumer-driven health-plan concepts are nothing new, as HSAs first hit the employer healthcare market a decade ago.

And, while HSA popularity got off to a slow start, some recent studies suggest that HSAs not only are picking up steam with employers, but they also are starting to transform plan members into better healthcare consumers -- a benefit of HSAs and consumer-driven healthcare touted by vendors who offer them. [...]

The Buck survey found that employees who contribute to HSAs generally become more engaged in managing their health after enrolling. For example, among the most telling findings, 51 percent of respondents set aside more money for potential medical costs than before they had HSAs. Twenty-nine percent have more discussions with their doctors about the cost of care and 13 percent more actively manage their chronic disease.

"In fact, respondents indicated greater engagement with each of 11 health-management activities we measured," says Atlanta-based Travis Klavohn, director of consumer health solutions at BenefitWallet. "Best of all, these results are consistent across the three surveys we conducted over a five-year period."
Since HSA members are responsible for a greater portion of their health costs, they also expect plan-provided tools and resources to help them make informed, rational decisions, Klavohn adds. When ranking important HSA product features, 44 percent of respondents ranked the ability to view claims on the HSA site as most important. They ranked paying medical claims on the HSA member portal second at 35 percent.

"Our data shows that HSA members are making wiser healthcare decisions," Klavohn says. "They are evaluating costs more closely before receiving care, shopping for lower priced drugs and choosing less costly services. And they attribute that changed behavior to owning an HSA."

Sander Domaszewicz, a principal in Mercer's Health Care practice, says offering employees proper tools and resources to help them manage their HSA spending is critical to achieving the goal of increasing their willingness to think about medical care cost and quality. He cited a 2008 Blue Cross Blue Shield Association survey that found employees who were HSA-eligible (with an account versus no account) reported that participants chose a lower cost treatment option 36 percent of the time, while 23 percent in non-CDHC traditional health plans did the same. When it came to asking their doctor about treatment costs, 52 percent with HSAs did so, while 33 percent did so in non-CDHC plans.

"If you give employees the tools and resources to make the best choices and don't just throw them to the wolves, they are much more willing to engage and be better healthcare consumers," he says, adding that the personal financial situation and the account portion contributed by the employer also are important. "No two HSA plans are the same, and you can have a wide variety of funding scenarios, which also can have an impact."

Domaszewicz says the best practice for HR leaders is to offer both the insurance coverage portion and the HSA financial account, because both are required for real success.

"You need both," he says. "And you need to wrap the best possible tools and resources into the mix so employees will take on that extra accountability."

Posted by at January 26, 2014 6:56 AM

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