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October 2017

5 New Findings That Show More Workers and Employers Are Utilizing HSAs

5 New Findings That Show More Workers and Employers Are Utilizing HSAs



A trio of surveys released by separate organizations in the past month indicate that American employers and workers are utilizing HSAs more often and warming to their benefits, especially as deductibles rise, the excise tax looms and healthcare reform now seems unlikely. Here are five of the latest findings from the Kaiser Family Foundation, the Health Research & Educational Trust, the Employee Benefit Research Institute and Mercer:


1) HSAs are increasingly becoming a significant part of health benefit programs.

Though the HSA market did not exist until 2004, in 2016 nearly 3 in 10 employees were covered by the plans. According to the Employee Benefit Research Institute (EBRI)’s HSA Database, enrollment in high-deductible, HSA-eligible health plans is today estimated to be between 20.2 million and 22.6 million policyholders and their dependents. Most HSAs in EBRI’s database are relatively new: More than three-quarters of HSAs have been opened since 2013.


2) HSA balances increased in 2016.

EBRI also found that annual contributions were higher than annual distributions, with two-thirds of HSA account holders ending 2016 with positive net contributions. The average HSA balance among account holders with individual or employer contributions was $2,532, up from $1,604 at the beginning of the year. And over 90 percent of HSAs with individual or employer contributions ended the year with funds to roll over for future expenses.


3) Most HSA enrollees receive contributions from their employers that mitigate rising deductibles.

In an annual study of private and nonfederal public employers with three or more workers conducted by the Kaiser Family Foundation and the Health Research & Educational Trust, a summary of findings notes that “the shift in enrollment to HDHPs does not [generally increase enrollee out-of-pocket liability]” in spite of trends toward higher deductible amounts within plan types. This is because most employers contribute to their employees’ HSA accounts, with 30 percent of covered workers in an HSA-qualified HDHP receiving account contributions that, if applied to their deductible, would reduce their cost sharing to less than $1,000. This is up from 28 percent of workers who received commensurate employer contributions last year.


4) Almost all health benefits professionals are in favor of higher HSA contribution limits.

In a Mercer survey of 300 health benefit professionals, released on Sept. 28, 92 percent of respondents said they favor permitting higher contributions to health spending accounts, and nearly as many (87 percent) would like to allow contributions up to the level of the out-of-pocket maximum.


5) Employers are approaching the forthcoming excise tax by encouraging enrollment in HSA-eligible plans.

With the Cadillac Tax scheduled to go into effect in 2020, virtually all respondents to the Mercer survey say they have already taken steps to minimize their exposure to the tax. Their No. 1 response: 76 percent added a high-deductible health plan, and 49 percent have taken steps to encourage higher enrollment in HSA-eligible plans. Additionally, 43 percent have increased employee cost-sharing requirements.

Aware of the most current HSA/FSA benefit information? Run through this healthcare checklist.

And here is how to communicate the value of HSAs to your employees

Why the Latest Healthcare Reform Defeat Shouldn’t Be a Distraction from Your Health Benefits Strategy

Why The Latest Healthcare Reform Defeat Shouldn’t Be a Distraction from Your Health Benefits Strategy


by Chris Byrd


Now that the Graham-Cassidy healthcare bill has failed, Congress will move on. We can expect it to concentrate instead on some pressing items on the calendar—things like agreeing on a continuing resolution to keep the government operating, raising the debt ceiling and reauthorizing programs like the Children’s Health Insurance Program. And of course, as we all know, congressional leadership is poised to take on the very complex issue of tax reform. In other words, after a six-month-long healthcare debate during which politicians expended a considerable amount of political and emotional energy, healthcare is largely off the table for now, barring the (unlikely) inclusion of healthcare in a tax reform package.


This means the Affordable Care Act remains the law of the land. While it is far from a perfect framework (and both sides of the aisle agree on that), the employer market has adjusted to it. The repeal and replace efforts of the past six months led some employers to place their benefit strategies on hold pending an understanding of what a new world order might look like. My advice: Don’t put off making decisions about your benefits strategy any longer. The deliberation and debate over a wholesale overhaul of the present system is finished. There will be some targeted efforts, most notably to stabilize the individual market, but the employer market framework is known—more of the same.


If there is disappointment among supporters of consumer-directed healthcare approaches, it is over the missed opportunity to pass reforms that would have expanded HSAs, restored the OTC tax benefit, eliminated the cap on FSA contributions and further delayed the implementation of the Cadillac Tax. In the absence of a broad reform bill, these supporters will continue to advocate for these provisions in separate pieces of legislation. But much of that effort may have to wait until after the end of the year, given that the attention of the tax-writing committees is fully focused on tax reform. The industry’s biggest priority continues to be to repeal, reform or delay the Cadillac Tax.


The market forces that are causing employers to continue to move toward consumer-directed, higher-deductible healthcare plans haven’t changed, and the trend of consumers having more skin in the game is inexorable because it works. Even without the legislative changes that would have been favorable to consumers with tax-advantaged accounts had the broad healthcare reform bills passed, these accounts will remain a very effective and attractive tool for both employers and consumers. Consumers should be making use of them, as they provide a significant benefit by helping them save money and become wise stewards of their healthcare dollars. Consumer-directed health approaches—and the tools and products that have sprung up around them—continue to be an effective part of the answer to the challenges presented by healthcare’s ever-increasing costs. As Congress gathers its energy for another round of discussion and debate—this time around tax reform—employers and consumers should not be distracted by what’s happening in Washington as it relates to their health benefits strategy.


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  

Tax Reform Is the Next Hot Ticket for Healthcare Regulation

Why Tax Reform Is the Next Hot Ticket for Healthcare Regulation


In spite of the many headlines and healthcare bills that have centered on repealing or replacing the Affordable Care Act (ACA), the healthcare landscape in the United States today looks remarkably similar to the way it did when the ACA was passed seven years ago: The majority of Americans still receive insurance through their employers. Continue reading

Consumers Are Searching for Health Info Via Smartphone

Consumers Are Searching for Health Info Via Smartphone—Meet Them There


All it takes is one look around a busy subway platform, café or concert to know that Americans are devoted to our smartphones: At any given time, it seems like most of us have one in hand –ready to help us follow a whim or tackle a task. Survey numbers corroborate this: Google found that 80 percent of Americans use a smartphone every day for an average of three hours a day, and while 67 percent use a computer daily, for one in four people a smartphone is the only device they use. This means that companies and healthcare providers that aren’t reaching their employees or customers on mobile are missing an opportunity to connect with a quarter of their audience. Continue reading

Open Enrollment Challenges and Opportunities by Employee Type

Decoding Open Enrollment Challenges and Opportunities by Employee Type


Open enrollment season is almost upon us: The 2018 open enrollment period will run from Nov. 1, 2017 to Dec. 15, 2017 – representing a shorter enrollment period than in the previous four years. As employers prep for a time that is notorious for being stressful and confusing for employees, it can be helpful to look at the different needs and habits of various employee types so that you can be ready to address their concerns and priorities. It’s also a great time to change the conversation about benefits and to remind employees what they are getting, how much it’s worth and why they need to own their benefits decisions. Continue reading