HSA Enrollment Increasing, But HSA Proficiency Remains Low

Health savings account (HSA) enrollment is increasing, and HSAs provide employees with a valuable financial tool, according to two recent surveys from America’s Health Insurance Plans (AHIP). However, a study from Alegeus Technologies found that employees’ understanding of HSAs remains low.

HSA enrollment increasing. The number of individuals covered by HSA/high-deductible health plans (HDHPs) increased to 17.4 million as of January 2014, according to a study of U.S. health insurance carriers from AHIP. The report, January 2014 Census Shows 17.4 Million People Covered By HSA/High-Deductible Health Plans, noted that this number has increased 15 percent since 2011.

AHIP found that enrollment in HSA/HDHPs through the large group market rose to 12.8 million individuals, up from 9.6 million in 2013. In 2014, 74 percent of all individuals enrolled in an HSA-qualified HDHP were in the large group market, the study noted.

AHIP’s census collected state-by-state enrollment information. The survey found that the states with the highest levels of HSA/HDHP enrollment were: Illinois (1,054,916), Texas (1,042,642), Ohio (802,511), Pennsylvania (691,750), and Michigan (690,932). The state with the lowest level of HSA/HDHP enrollment by far was Hawaii (2,376).

Financial flexibility. Another recently released survey from AHIP and the America Bankers Association’s HSA Council found that HSA plans are a valuable financial tool for consumers, providing flexibility to cover immediate medical expenses and to save for future health care costs. More than half (52 percent) of all account holders spent more than 80 percent of their HSA funds for health care expenses during 2012.

“This study confirms that HSAs are being used as they were designed: to pay for routine health care needs and to save towards future medical expenses,” ABA’s HSA Council executive director Kevin McKechnie said. “HSAs have the advantage of offering consumers greater choice and control over their health care.”

Consumers rely on HSAs when planning for future medical expenses. Fifty-five percent of all HSAs received personal contributions during 2012. While end of the year account balances varied, roughly 80 percent of accounts surveyed had a positive balance that could be carried over to the next year to help pay for future expenses.

“The health care needs of individuals and families are diverse, and HSA plans offer consumers important flexibility and support to make the spending decisions that are right for them,” said Karen Ignagni, AHIP president and CEO.

The survey found the following:

• More than half (55 percent) of all HSAs received personal contributions during 2012 and 44 percent of the accounts received employer contributions. Of those accounts, the average personal contribution was $2,337, and the average contribution from employers was $1,142.

• Fifty-eight percent of all accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081.

• Nineteen percent of all accounts had $0 available at the end of the year. Thirty-one percent had $1 to $499, 11 percent had $500 to $999, 12 percent had $1000 to $1999, 14 percent had $2000 to $4999, and 12 percent had at least $5000.

HSA proficiency low. While the number of HSAs is increasing and provides account holders with a valuable financial tool, 70 percent of HSA account holders cannot pass a basic HSA proficiency quiz, according to the 2014 Consumer and Employer Healthcare Benefits Survey from Alegeus Technologies. The study found that more than 40 percent of HSA accountholders view HSAs as spending accounts, indicating a lack of awareness of the ability to save money in an HSA beyond the plan year or invest HSA funds.

Alegeus found that most employers today offer limited benefit communication and support. Sixty-five percent of employers communicate about health benefit enrollment only during open the enrollment period. Nearly 60 percent rely only on plan summary documents and enrollment forms to communicate benefit plan/account options, and only a third offer interactive tools such as plan comparison calculators. Interestingly, in terms of quality of communication and support, employers seem to think they are doing a better job than consumers perceive they are doing. In their assessment of the quality of various aspects of employer benefit communications (clarity, depth, format, personalization and frequency), consumer ratings were consistently 20 percent lower than employer ratings.

For more information, visit http://www.ahip.org. or http://www.alegeus.com.
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