As of January 2011, approximately 11.4 million Americans were covered by health savings accounts (HSAs) linked to high-deductible health plans (HDHPs), an increase of more than 14 percent since 2010, according to a survey by America’s Health Insurance Plans (AHIP), a trade association.
HSAs were authorized starting in January 2004. Since then, AHIP has conducted an annual survey of the HSA health plan market. The 2011 survey shows that enrollment in HSA plans nearly doubled over the previous three years, from 6.1 million enrollees in January 2008 to 11.4 million in January 2011.
“HSA plans continue to be a vital source of affordable coverage for millions of families and employers across the country,” said Karen Ignagni, president and CEO of AHIP, in a statement.
Other findings from the survey include the following:
• Between January 2010 and January 2011, the fastest-growing market for HSA plans was for large-group coverage, which rose by 26 percent, followed by individual market coverage, which grew by 15 percent.
• About 2.4 million people were enrolled in HSA plans in the individual market, approximately 2.8 million in the small-group market and more than 6.3 million in the large-group market.
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Health Care Reform's Impact
AHIP is reaching out to policymakers on both sides of the aisle about ways to mitigate what the group views as potential unintended consequences of provisions in the Patient Protection and Affordable Care Act that could disrupt or limit the availability of coverage through HSA plans. These include:
• Restrictions on over-the-counter medications. Starting in 2011, HSA funds can no longer be used to purchase over-the-counter (OTC) medications without a prescription. “This requirement reduces consumers’ access to common OTC drugs, such as allergy medications, and instead provides an incentive to use higher-cost prescription drug alternatives,” according to AHIP.
• Medical loss ratio. The medical loss ratio regulation—requiring insurers to spend at least 80 percent of consumers’ premiums on non-administrative, direct care for patients and efforts to improve care quality—is particularly problematic for HSA-eligible HDHPs, according to AHIP. By congressional design, HDHPs were intended to provide consumers with a high-deductible, low-premium coverage option along with the ability to save for health care expenses through an HSA. “While these plans typically have lower benefit costs, they are not necessarily less costly to administer on a per-enrollee basis and, as a result, may naturally have lower loss ratios,” according to AHIP. “Policymakers should recognize the unique nature of HSA plans to preserve consumers’ access to this important coverage option,” the group advised.
• Minimum actuarial value requirement. Effective in 2014, insurance coverage sold in the individual and small-group markets must meet certain minimum actuarial values for each level of coverage provided: bronze, silver, gold and platinum. The lowest level, bronze, must have a minimum 60 percent actuarial value, which is the dollar value of the average expected benefits paid out by the plan. The health care reform law directs the Health and Human Services secretary to establish a process for determining actuarial values and states that the secretary “may” include the amount of the annual employer HSA contributions toward the actuarial value calculation. "Including employer HSA contributions in the actuarial value calculation significantly increases the likelihood that HSA plans will meet the minimum requirement and will help ensure consumers continue to have access to the high-quality, affordable coverage they rely on today," according to AHIP.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Consumer-Driven Health Plans Demonstrate Savings, SHRM Online Benefits Discipline, June 2011
Income Gap Narrows for CDHP vs. Traditional Plan Enrollees, SHRM Online Benefits Discipline, May 2011
For 2012, Higher Limits for HSA Contributions, Out-of-Pocket Expenses for High-Deductible Plans, SHRM Online Benefits Discipline, May 2011
Consumer-Driven Decision: HSAs vs. HRAs, SHRM Online Benefits Discipline, May 2011
RAND Study: CDHPs Don't Adversely Impact 'Medically Vulnerable,' SHRM Online Benefits Discipline, April 2011
Unexpected Boost for Consumer-Directed Health Plans, HR Magazine, December 2010
SHRM Online Benefits DisciplineSHRM Online Health Care Reform Resource Page