HSAs Viewed as Cost-Saving Option by Employers and Account Holders

By Stephen Miller, CEBS Nov 16, 2011

Employers and employees perceive health savings accounts (HSAs) as a viable vehicle to manage health care costs without compromising care, according to a November 2011 survey report.

The 2011 Employer and Account Holder Surveys were commissioned by ACS, a provider of business outsourcing services, and conducted by Buck Consultants. Both firms are Xerox companies. The surveys collected data mostly from small and medium-sized U.S. organizations and reflect the perspective of this market segment: 86 percent of responding employers had less than 100 employees, and 75 percent had less than $10 million in revenue. Responses were received from more than 14,000 individual HSA holders and from more than 300 employers.

The results show that a majority of small-to-mid-sized U.S. employers (77 percent) believe that a consumer-directed strategy that uses a high-deductible health plan (HDHP) with an HSA is key to controlling health care costs. Additionally, more than half (56 percent) of account holders said that their HSA-qualified plan provides an affordable health care option.

“This year’s results reveal an interesting phenomenon—HSAs are doing more than just saving consumers and employers money. They are prompting a shift in behavior that is helping employees make better decisions about their own health care,” said Tom Hricik, an ACS principal.

Three-quarters of respondents said the ability to control their health costs was an “extremely” or “very” important benefit of HSAs. Account holders indicated that they are:

Setting aside more money than before they had an HSA to cover potential medical costs (54 percent).

Engaging in healthier lifestyle choices(18 percent).

Researching preventive care programs(18 percent).

Shopping for lower-priced prescription drugs (28 percent).

Planning health care betterthroughout the year (31 percent).

Moreover, compared with their prior coverage under a traditional health plan, account holders perceive that they are using medical services at approximately the same rate but are shopping for care more than before.

Lower Costs

Employers and employees said they are benefiting from more educated health and wellness decisions. Additionally, HDHPs were found to be less costly to employers for individual and family coverage. Employers reported that the cost of providing HSA-qualified plans was less than the cost of providing a standard preferred provider organization (PPO) plan:

The average direct cost to provide an HDHP/HSA was $5,469 for individual coverage and $9,909 for family coverage.

The average PPO cost was $7,158 for individuals and $10,691 for family.

(For a related story on the costs of consumer-directed plans vs. traditional coverage, see the SHRM Online article "Per-Employee Premiums: PPOs Ranked Highest, CDHPs Lowest in Benchmarking Survey.")

Surveyed employers were extremely committed to offering employer-sponsored health insurance for the foreseeable future and were equally committed to retain their HSA-qualified plans. Among employers:

Only 6 percent said they were very likely to discontinue offering the HSA-qualified plan.

Just 7 percent said they would be very likely to move employees to health care exchanges created under the health care reform law beginning in 2014.

Additional Findings

Among other key findings from the 2011 Employer Survey:

Employers that implemented an HDHP and HSA program had on average 49 percent of eligible employees enrolled in the HDHP.

69 percent of employers contributed to their employees’ HSA accounts.

Employers’ contributions to HSAs averaged $1,000 for individual coverage and $1,500 for family coverage.

Among other key findings from the 2011 Account Holder Survey:

72 percent of account holders indicated that they chose the HSA-qualified plan actively although other plan options exist for them.

82 percent reported that the ability to save tax-free money was “extremely” or “very” important in selecting an HSA-qualified plan.

79 percent said having an HSA was valuable to them.

64 percent said that their HDHP/HSA combination met their family’s needs.

Stephen Miller, CEBS, is an online editor/manager for SHRM.​

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