Category:
High Deductible Health Plans

HDHPs: Good for More than Physical Health

HDHPs: Good for More than Physical Health

05/17/2018

by Chad Wilkins, executive vice president of Webster Bank and president of HSA Bank

 

At HSA Bank, a division of Webster Bank, N.A., our goal is to empower consumers to make the most of their healthcare dollars. We work to inspire consumers to own their health by simplifying the health account experience and utilizing cutting-edge technology and innovation to help them make sure they’re on their way to a healthy financial future.

 

To that end, we recently released the HSA Bank Health & Wealth IndexSM for 2018, a new report that measures consumers’ financial and physical health. More than 1,000 U.S. adults were surveyed about their health plan enrollment status, health practices, ability to pay for health-related expenses, and confidence in their own health and wealth.

 

The results showed that while consumers are taking a more proactive approach to their physical health, that’s not necessarily the case with their financial health. In fact, 41 percent never save money for future healthcare expenses, and 35 percent never consider cost when selecting health services.

 

The good news is that consumers enrolled in high deductible health plans (HDHP) scored in the optimally engaged category. This was largely due to these consumers being more likely to frequently save speci­fically for future healthcare expenses and consider cost when selecting health services.

Consumer-directed health plans can play a role in keeping consumers both physically and financially healthy.

 

Are you enrolled in an HDHP? Do you have a health savings account (HSA)? What is your health and wealth index score? Find out here.

 


Chad Wilkins HSA Bank

Chad Wilkins

Executive vice president of Webster Bank and president of HSA Bank

Chad Wilkins serves as an executive vice president of Webster Bank and president of HSA Bank where he is responsible for leading the organization and its people toward sustainable growth well into the future. Chad joined HSA Bank in 2014, bringing with him more than 25 years of experience in the banking and health insurance industries.

 

Read the full HSA Bank Health & Wealth Index here.

Spread the Word about Money-Saving Benefits and Services

Spread the Word about Money-Saving Benefits and Services

Getting geared up for open enrollment? Organizations everywhere are reviewing benefit offerings and preparing their process for this annual fall ritual. Employers are seeking to balance their healthcare spend with providing the support their diverse workforce needs.

A key strategy that remains popular with organizations is offering consumer directed health plans (CDHP). These plans are often paired with a health savings account or a flexible spending account. The percentage of employees enrolling in HDHPs has been increasing steadily over the past five years. Driving the trend, is the savings employees see with the average monthly paycheck deduction for individual-only coverage in a HDHP at about $90, compared to $140 for a PPO plan.
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IRS Announces Health Savings Account Contribution Limits for 2018

Health Savings Accounts have received a lot of attention over the past few months as the accounts manifest themselves as a leading option for certain employees enrolled in a high-deductible health plan, allowing these employees to contribute money pre-tax for healthcare expenses in the short- and long-term.

Background

A health savings account a tax-favored account that allows eligible individuals covered by a qualified High-Deductible Health Plan (HDHP) to pay for current and future qualifying medical expenses tax-free. Defined contribution healthcare dollars are commonly used to fund health savings accounts. Signed into law in 2003, these accounts have grown in importance over the years and are expected to be a lynchpin of future healthcare reforms.

May 4, 2017: IRS Announces Contribution Limits for HSAs in 2018

On May 4, 2017, the Internal Revenue Service released Revenue Procedure 2017-37, providing the 2018 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code. The contribution limits for 2018 are as follows, alongside contribution limits for 2017, graphed by the Society for Human Resources Management:

Contribution and Out-of-Pocket Limits
for Health Savings Accounts and High-Deductible Health Plans
For 2017 For 2018 Change
HSA contribution limit (employer + employee) Self-only: $3,400

Family: $6,750

Self-only: $3,450

Family: $6,900

Self-only: +$50

Family: +$150

HSA catch-up contributions (age 55 or older)* $1,000 $1,000 No change**
HDHP minimum deductibles Self-only: $1,300

Family: $2,600

Self-only: $1,350

Family: $2,700

Self-only: +$50

Family: +$100

HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) Self-only: $6,550

Family: $13,100

Self-only: $6,650

Family: $13,300

Self-only: +$100

Family: +$200

* Catch-up contributions can be made any time during the year in which the HSA participant turns 55.

** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change.

 

Difference Between IRS and HHS Limits

Additionally, the IRS limits differ from those set by the Affordable Care Act and announced by the Department of Health and Human Services on December 22, 2016:

2017 2018
Out-of-pocket limits for ACA-compliant plans (set by HHS) Self-only: $7,150

Family: $14,300

Self-only: $7,350

Family: $14,700

Out-of-pocket limits for HSA-qualified HDHPs (set by IRS) Self-only: $6,550

Family: $13,100

Self-only: $6,650

Family: $13,300

 

Related Resources: Health Savings Accounts

We’ve been talking about the evolution of HSAs alongside the Affordable Care Act, offering key insights into the best practices for employers, employees, and servicers like banks and other financial institutions. Learn more by reading our resources below:

Webcast Recap: Healthcare Benefits Trends to Watch in 2017

The only constant in the healthcare benefits environment is change. As 2017 marks a “changing of the guard” in the political world, a year in which technology is improving, and a year in which you will need to compete aggressively for the best talent; your organization must be able to adapt, evolve, and provide benefits that meet your employees’ unique needs.

In Wednesday’s article, we took a deeper look at the challenges and opportunities that other employer groups are facing in offering healthcare benefits as we looked into the results of our 2017 Healthcare Benefits Trends Benchmark Study, which was given to all attendees of our webcast and provided many insights from nearly 300 benefits professionals at organizations of all sizes.

Trends and Talking Points: 2017 Healthcare Benefits to Watch Webcast

The Healthcare Benefits Trends to Watch in 2017 Webcast brought together three of the leading voices in the community to present their insights on our survey, as well as offering strategies and predictions for the year ahead.

Featuring Tiffany Wirth, Executive Director of the Healthcare Trends Institute and Vice President of Marketing at WEX Health, Sander Domaszewicz, Principal and Senior Consultant at Mercer, and Chris Byrd, Healthcare Operations Officer at WEX Health, these leaders brought decades of combined experience in healthcare benefits, legal policy, and business strategies, condensing a lot of highly valuable information into a brief, one-hour webcast.

Engagement Driving Changes in 2017

With many employer groups already making changes to their strategies over the past few years—implementing a wellness or preventive health program, adjusting cost sharing, or focusing on defined contribution—the top concern for employers in 2017 is employee engagement.

Engaging these employees, however, does pose a challenge as nearly 40% of employees had concerns about benefit communication and education and only 36% felt that benefit cost information was clearly presented, according to our consumer survey completed in Fall 2016.

Five Top Benefits Communication Methods

With engagement being its own issue, employers need to look at the way they communicate. While email may be right for some, other employees have other preferences, with a notable discrepancy between employer methods and employee needs:

Employer Communication Methods Employee Communication Preferences
Email: 77.1% Website: 54.4%
Meetings with HR/Benefits: 51.4% Printed Factsheets: 47.4%
Print: 49.1% Live Presentations: 38.6%
Intranet: 48.6 Email: 38.6%
Meetings with Advisors: 41.1% Videos: 23.7

 

Employers feel confident in their ability to educate employees, rating themselves at a 7.2 out of 10, roughly in line with employees rating their employers at 69% in the consumer survey.

Cadillac Tax Not Changing Many Minds

Even as this survey was completed during the election season, many employers are still in a holding pattern with respect to the Cadillac Tax. As it had already been delayed once from 2018 to 2020, respondents may have expected the threat of the tax to be delayed again, as fewer than 6% of employers have made aggressive changes to prepare, and a vast majority were waiting for definitive guidance:

  • 6% of Employers haven’t taken any actions
  • 7% are unsure what they need to do
  • 7% were not affected

Some Things Change, Others Stay the Same

As much as there have been changes in the way employers look at benefits, many things have remained steady:

  • Dental, Family Coverage, and Vision were the most commonly offered benefits.
  • Three Quarters of Employers in the last two years believe that benefits offerings are critical to their recruitment and retention.
  • In this and last year’s report, nearly 90% are still yet to make changes for the Cadillac Tax

Much, Much More: Healthcare Benefits Trends to Watch in 2017

If all of the information above came from the first ten minutes of the webcast, imagine what you can learn from the remaining 50 minutes.

The entire Healthcare Benefits Trends to Watch in 2017 features proprietary research into health plans, costs, adoption rates, and more from Mercer, presented by Sander Domaszewicz, Principal and Senior Consultant, and an in-depth look at the legal and regulatory outlook under Trump, the importance of the CURES Act passed last year, and the repeal and replace/revise and repair future for the Accordable Care Act, presented by Chris Byrd of WEX Health.

Learn more about what you can expect and how you can prepare in 2017 by watching the entire Healthcare Benefits Trends to Watch Webcast.

Healthcare Benefits in 2017: What Employers Have to Say

It’s been a tumultuous few years for the healthcare benefits community, and as the Trump administration takes office, the changes are just beginning. To address this, the Healthcare Trends Institute recently completed a survey of benefits professionals from across the United States to learn more about the trends, preparations and expectations for the coming year.

Trends in Healthcare Benefits: 2017 Healthcare Benefits Benchmark Study

The 2017 Healthcare Benefits Benchmark Study was completed by over 250 human resources executives, benefit specialists and other benefit decision makers from organizations ranging in employee size from less than 50 to over 2,500. Below, we will share some of the key insights and what they mean for employer groups in 2017.

Among the notable considerations for employers heading into 2017:

Employers Buying into Healthcare Consumerism

Since the passing of the Affordable Care Act in 2010, employers have been encouraging their employees to take more control of their own healthcare decisions by offering a high-deductible health plan (HDHP).

The Move to HDHP

High deductible health plans are plans that have minimum deductibles of $1,300 for individuals and $2,600 for families. One of the main selling points of an HDHP is that it combats rapid increases to monthly premiums for employers and employees, as shown by the relatively flat Medical Cost Trend over the past 4 years. The increasing popularity of these plans grew as a result of rising healthcare costs and the passing of the ACA, and pose benefits for both employers and employees:

  • For employees, high deductible health plans were designed to help them to lower premiums, focus on preventive care, shop around for affordable care, use emergency rooms only for emergencies, and ultimately take more control of their healthcare decisions.
  • For employers, HDHPs helped to combat rising premiums while shielding them from the Cadillac Tax, which was initially set to begin in 2018.

With all of this in mind, 2016 marked a milestone for healthcare consumerism, with the amount of organizations offering HDHPs jumping from 28% four years ago to 39% in last year’s survey to 53% in this year’s survey.

Pairing HDHP with Consumer-Oriented Accounts (HSA, HRA, FSA)

With this rise in HDHPs came an increase in the number of employees being enrolled in a Health Savings Account, Healthcare Reimbursement Arrangement, or Flexible Spending Account, as this year’s survey found that 51.5% of respondents’ employees are enrolled in one or more of these plans/arrangements.

By offering one or more of these arrangements, employers are demonstrating that they are committed to helping employees afford out-of-pocket healthcare expenses if and when they arise, making people-first decisions rather than money-first ones.

Notably, however, the move to HDHP does require effective communication, as there is a great deal of misunderstanding among consumers about why these plans help them and how they can use them effectively. Learn more about common misunderstandings in 5 Benefits Problems Employees Face and how to address concerns in How to Talk About Healthcare Consumerism with Your Employees.

Focusing on the Advantages

Organizations are relying heavily on their benefits programs to recruit, retain, and engage employees. Even if many employers have moved away from the traditional forms of healthcare benefits that were prevalent in the industry decades ago, the benefits offerings of today still can represent a significant investment in happier, healthier, and more engaged employees. Additionally, a well-defined benefits strategy can play a major role in improving company reputation as a leader and one that cares about its employees. In BenefitsPro’s Analysis of our whitepaper:

Respondents were asked to rank on a scale of 1 to 10 how strongly they agree with the statement “the quality of a benefits package impacts the reputation of my company,” with 10 being “strongly agree.” Not surprisingly, given that such packages are looked upon as recruiting tools, 67 percent put the statement at 7 or higher, with nearly a quarter choosing “strongly agree.”

Learn More: Download the Entire 2017 Healthcare Benefits Trends Benchmark Study

The entire 2017 Healthcare Benefits Trends whitepaper takes a much deeper look into the trends to look out for in 2017, including plans and insights from other employer groups. The national survey went to over 250 human resources executives, benefit specialists and other benefit decision makers from organizations ranging in employee size from less than 50 to over 2,500. Click Here to Download.