HSAs Spur Employees to Better Manage Health

December 11, 2013 (PLANSPONSOR.com) – Employees using health savings accounts (HSAs) become better at managing their health, a survey finds.

According to the “BenefitWallet: 2013 Member Survey Report” from Buck Consultants, a division of Xerox, 51% of those queried say they set aside more for health care costs than before they started using HSAs. In addition, 29% of respondents say they have more discussions with their doctors about the cost of care and 13% more actively manage their chronic disease.

“In fact, respondents indicated greater engagement with each of 11 health management activities measured,” says Travis Klavohn, director of Consumer Health Solutions for BenefitWallet, the HSA administration service from Xerox.

The survey also found HSA users:

  • Are predominantly college-educated, long-tenured employees with families;
  • Voluntarily select HSAs even when other health plans are offered by their employer;
  • Receive employer contributions into the HSA more often than not;
  • Select HSAs because of the low cost of insurance and tax advantages; and
  • Build wealth as their account balances grow over time.

The authors of the report observe that these factors result in an overall trend of HSA members making wiser health care decisions.

Klavohn adds, “Employees are evaluating costs more closely before receiving care, shopping for lower priced drugs and choosing less costly services. They attribute their changed behavior to owning an HSA.”

According to the report, people feel that paying medical expenses with tax-free money is important. According to the report authors, “This is true for short-term expenses, long-term expenses, and retiree medical costs. One can conclude that HSAs are not only used as savings vehicles, but also as spending accounts over an individual’s lifetime.”

Those using HSAs also have certain perceptions and expectations. Employees see HSAs as both health management tools and financial management tools. Since employees are being asked to bear a greater share of the cost of health care services, in return they expect HSAs to provide the transparency required to enable more informed decisions about health care and related costs.

In addition, employees expect an HSA experience enabled by web and mobile technology with easy access to information. When ranking important HSA product features, 44% of employees ranked the ability to view claims on the HSA website as most important. Paying medical claims on the HSA member portal ranked second at 35%.

The report also asked employees about the Patient Protection and Affordable Care Act (or ACA) and how it figures into to their planning for health care:

  • With regard to choosing a health insurance exchange plan, 42% say they remain undecided as to whether they will obtain health insurance on exchanges, while 35% are unlikely to do so and 23% likely will;
  • Forty-six percent think the ACA will increase the overall cost of medical insurance, while 14% think it will decrease costs and 12% feel it will have no impact; and
  • Forty-six percent believe the ACA will increase their personal out-of-pocket medical costs, while 13% believe it will decrease their costs and 13% feel it will have no impact.

“HSA members’ concern about ACA-driven cost increases aligns with their heightened consumerism,” says Ruth Hunt, a principal and health engagement leader for Buck Consultants. “Employers can reassure employees regarding the continued availability of tools and resources, saying that if they like their HSA, they can keep it.”

The report is from the third bi-annual survey of HSA members. It was conducted online by Buck Consultants and queried 23,000 BenefitWallet members. A free copy of the report can be requested here.