Employers continue to seek health care cost savings through consumer-driven health plans (CDHPs) with health savings accounts (HSAs), and the less popular health reimbursement arrangements (HRAs), according to survey data from United Benefit Advisors (UBA).
In a new special report, UBA takes a deeper look into which aspects of these accounts are most successful, and least successful, broken down by industry, employer size, and region.
Its research found 35.1% of all plans offer an HSA or HRA, which is up from 34% in 2015, a 3.2% increase. An HSA is offered in 24.6% of plans, a 21.8% increase from five years ago. HSA enrollment is at 17%, a 25.9% increase from 2015, and nearly a 140% increase from five years ago. The average employer contribution to an HSA is $474 for a single employee (down 3.5% from 2015 and 17.6% from five years ago) and $801 for a family (down 9.2% from last year and 13.7% from five years ago).
Generous HSA contributions, like those found in New England, among small employers (25 to 49 employees), and within the education industry certainly play a role in their impressive enrollment successes. However, North Central employers have achieved high enrollment with average contributions. Very large employers have made surprising gains in attracting employees to HSA plans (they lead with 19.1% enrollment on average) with below average contributions ($413 for singles).
The difference between HRAs and HSAs tends to lead to very different usage, finds UBA. HRAs can sometimes be complicated to implement if they do not have a simple structure that employers and employees can understand, which in some cases has led to a flatter growth rate. Generally, average prevalence and enrollment rates for HRAs both hover around 10%. Average HSA enrollment, however, is 17% compared to a 24.6% prevalence rate. The gap is more striking among large groups who, though they have the above average 19.1% enrollment rate, have a 41% prevalence rate, indicating an opportunity to improve employee interest in these plans.
“The best course of action is to increase employee education about the use of HSAs and the benefits of having one in addition to recommending that our employer groups partially fund the HSA as well to assist with their high deductible,” says Terriann Procida, UBA board member and founding partner, Innovative Benefit Planning, LLC, a UBA Partner Firm.
UBA’s report, “How Health Savings Accounts Measure Up,” may be downloaded from here.