Tip of the Day: Prepare for a health care battle

As summer approaches, so does the official start of a duel over health care reform. A host of proposals from Republicans and Democrats are on the table, and Sen. Charles Grassley acknowledged to reporters earlier this spring, "This is the toughest issue we have ever taken on -- every part has got a chance of blowing up."

One of the stickiest points of contention is whether or not reform should incorporate a public plan option. To keep with all the "duel" imagery, Les Masterson of Health Plan Insider writes that CDHPs and HSAs should prepare to "do battle" with a public plan.

As Masterson notes, some 8 million Americans are covered by HSA-eligible plans with enrollment steadily growing. He cites two recent surveys touting the accounts and writes:

"These two studies were released at the same time that the health care reform debate rages in DC. That's not a coincidence. Private health plans are rightfully viewing portions of health care reform as a direct assault on their business.

HSAs, the poster boys for creating better health care consumers and lowering health care costs under the Bush administration, are not seen by most Democrats as a solution—but rather a problem that prices the poor out of quality health care."

So pros, since employers increasingly are turning to HSAs to lower cost, you should get your war paint ready if you don't want to see HSAs decline. Or, perhaps you're content to see employees enroll in the public plan. What are your thoughts? Comment and let me know.

Tip of the Day: Raise the roof (on HSA limits)

The Internal Revenue Service recently released a notice outlining 2010 minimums and maximums for health savings accounts plans and high-deductible health plans.

For calendar year 2010, the annual HSA contribution limit for an individual with self-only HDHP coverage is $3,050, up $50 from 2009. For an individual with family coverage under a HDHP, the new limit is $6,150, up $200 from 2009.

The 2010 minimum on HDHP deductibles, for self-only HDHP coverage, jumped to $1,200 (up $50 from 2009), and $2,400 (up $100 from 2009) for family coverage. The 2010 maximum on HDHP out-of-pocket expense increased to $5,950 (up $150 from 2009) for self-only HDHP coverage and $11,900 ($300 from 2009) for family HDHP coverage.

Related EBN coverage:
What's in it for me?
Offering answers to 'What's happening to my health plan?'

Overheard @: HSA enrollees have no regrets

As more employers switch to CDHPs and HSAs to fight the good fight against health care costs, they have greater reassurance that the plans will be well-received by employees, as two new surveys show HSA participants have few regrets about switching to the plans.

In an online survey by OptumHealth, 82% are content with their accounts and 74% would recommend an HSA to a friend. The online survey involved 500 HSA owners and was conducted in February and March.

Further, countering the charge from opponents that HSAs are only for the healthy and wealthy, America’s Health Insurance Plan reports that almost half (49%) of HSA holders live in neighborhoods with median incomes under $50,000, according to 2000 Census data.

AHIP also finds about 8 million Americans are covered by an HSA-eligible insurance plan. The study also reveals that HSA owners are forward thinkers when it comes to financial and physical well-being. For instance, 64% have asked about generic options for medication and 47% have queried their physicians about charges.

HSA accountholders also believe that people need to become more engaged in their health care, with 83% of respondents agreeing that consumers should research and comparison shop their health care options as they would for a new television set. Additionally, 72% said that individuals should be responsible for helping to manage their health care costs.

Related EBN coverage:
Readers sound off on March editorial [on HSAs]
CDHPs praised, ROI panned

Overheard @: Readers sound off on HSA editorial

Never in my wildest dreams could I have imagined the response to my March editorial, "I regret enrolling in an HSA." For all the mail I've received since it was published — which ranged from congratulatory to condescending to critical — I am heartened by the vigorous debate regarding the future of our nation's health care system and that, if this response is any indication, benefits stakeholders will continue to be a powerful voice in that ongoing dialogue.

Thanks to all for writing. Click here to read a sampling of the mail I've received, edited for space and grammar.

News You Can Use: Pick a card, any card

Okay, full disclosure: This data comes from a company that sells prepaid benefit cards, but still -- if you're looking to implement an HSA, HRA or FSA, a survey from Evolution Benefits shows that a benefit card could make all the difference.

Health care consumers report the availability of benefits cards positively influenced their decision to sign up for tax-favored accounts, including FSAs, HSAs or HRAs, Evolution finds. Benefit cards also made accounts easier to use and more effective.

The survey was created to gauge the effectiveness of three program components: cardholder communication; benefit card usage; and the benefits of having a card associated with a health care account. Evolution Benefits developed and conducted the survey, which was distributed to MasterCard cardholders at 10 employers in various industries.

Two-thirds of the nearly 900 respondents indicated that availability of the card influenced their decision to sign up for the benefit, while almost three-quarters said that having a card made using their account funds easier. The majority of consumers commented that they have encountered few – if any – problems and know exactly where the card can be used.

Card communication, in fact, was rated as good to excellent. As a result, 92% of the respondents said they knew where and how to use the card – and which items are eligible for pre-tax treatment based on IRS guidelines. In addition, 87% of respondents found it advantageous to have point of service substantiation.

Do you offer a benefits card? How well is it working for ya? Comment and let me know.

Overheard @: I regret enrolling in an HSA

Detailing findings from Employee Benefit Research Institute/Commonwealth Fund research, I confront my misgivings about enrolling in a high-deductible health plan with an HSA. Download my podcast here.

News You Can Use: CDH gets boost from economy

Although flagging in recent years from low employee enrollment, consumer-driven health plans are getting a serious second look from employers that cannot sustain any more rate hikes amid the struggling economy, AIS Health reports.

Insurers and employers are drawn most strongly to HSAs, but HRAs remain a viable option, according to AIS's findings.

Scone: In search of HSA advice, assurance

Two weeks ago – after much discussion with my husband, fine-tooth-combing our family budget, using three comparison tools and a medical cost estimator, and reading every page of communication my employer sent on the subject – I enrolled my family in a high-deductible health plan with an HSA for 2009. I still wonder if I did the right thing.

Ever since, I’ve found myself preparing for a sort of health care Armageddon – scheduling myself, husband and children for every doctor’s and dentist appointment we need, weaning my infant daughter off a long-term medication, and informing the specialist she sees (and that we adore) that we likely won’t be back to see her because I’m not sure we’ll be able to afford the office visit come January.

Although it took much consideration, I feel railroaded into my decision. The HDHP I was offered carried about the same premium as the current PPO that covers my family now –already near the top of what our family can afford. The more traditional health coverage options were two and three times what we currently pay, and there’s no way we could sustain that (while continuing to save for retirement and meeting our monthly expenses).

So, I did the only thing I could do: checked the HDHP option, funded my HSA up to the deductible and hoped for the best.

Even though I can’t change my decision now, I still question it. I’ve discovered that writing about this topic and living it are two different things – and I consider myself much more informed than my colleagues at other non-benefits-related publications.

So I turn to you EBN readers, the exceptional pros that you are, for advice and assurance (and promise not to hold you accountable). Any recommendations you have would be great; just tell me what you would if I worked at your company.

News You Can Use: One HSA myth debunked, survey finds

Although it’s long been said HSAs only appeal to the healthy and wealthy, a recent survey from UnitedHealthcare finds that HSA enrollment rates are highest (74%) among employees of small businesses (one to 99 employees) and lower-income individuals (64%).

“This latest research affirms our belief that Health Savings Accounts have broad appeal for many health care consumers, regardless of income, age or employer environment,” says Meredith Baratz, vice president of market solutions at UnitedHealthcare.

Although the survey results create doubt about one HSA truism, they appear to have confirmed another: that employer funding is the key to spurring HSA enrollment. About two-thirds of employers provide funding to HSAs, UnitedHealthcare finds. Regardless of funding level, when an employer contributed to the HSA, 86% of consumers opened an account, compared with only 27% when the employer did not.

Tip of the Day

Determined to spur HSA adoption come hell or high water, the government has launched a site to educate small employers about the accounts and their merits. To learn more, visit www.hsa.gov.

Tip of the Day

Under what circumstances employers can recoup HSA contributions? Wolters Kluwer breaks it down.

Scone: HSAs not working, time to let go

I know it’s hard to admit when something just isn’t working the way you’d hoped, despite your best efforts. It can be easy to try to force the issue or put blinders on and simply tell yourself things are fine. However, it takes true strength to acknowledge something has failed and move on.

I think we’ve reached that point with health savings accounts. Progressive employers have implemented the plans with workers and yes, some have achieved savings. But I think we all know that HSAs have not had the revolutionary effect on health care that many of us believed they would.

In addition to consistent single-digit adoption among individuals who have a choice in health plans and high levels of dissatisfaction among active workers, new research from the Employee Benefit Research Institute shows contribution limits make HSAs minimally beneficial to retirees as well.

As contributions are limited ($2,900 for individuals and $5,800 for families), and because HSAs are linked to high-deductible health plans, it is likely HSA owners will tap their accounts to pay for medical expenses during their working years, EBRI finds. Further, distributions cannot be used for employment-based retiree health insurance until an individual has reached age 65. Thus, early retirees do not have immediate access to HSA accounts for retiree health premiums.

“The maximum savings that can be accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for insurance premiums and out-of-pocket expenses,” researchers bluntly conclude in this month’s EBRI Notes.

Further, a sneak at the Sept. 1 EBN reveals that experts say allowing participants to fund HSAs with IRA funds won’t help spur use either.

So are we ready to say CDHPs or at least HSAs aren’t the health-care savior we’d hoped for? Not to sound clairvoyant, but EBN made this call last year. There’s even more evidence now. Enough already.