Originally posted by Kathryn Mayer on March 25, 2015 on benefitspro.com.
This last year may have seen another big increase in the number of health savings accounts. But it also saw a drop in the amount employers are contributing to those accounts.
Employees saw a 10 percent decrease in their average single HSA employer contribution from the previous year, according to new data from United Benefit Advisors. In 2013, employers contributed an average of $574 per employee but last year that dropped to $515, the report says.
Average family contributions also fell 7 percent during the same period, from $958 to $890.
UBA said the survey results reveal a correlation between enrollment in HSAs and consumer driven health plans, linking higher HSA contributions to increased enrollment in the cost-saving plans.
“Employer HSA funding strategies have changed in recent years in response to the Patient Protection and Affordable Care Act and its impact on employer-sponsored health insurance plans,” says Brian Goff, president and CEO of Insurance Solutions, a UBA partner firm.
“When HSA products were new, the employer could take the premium savings and fully fund the deductible. Now, however, premium reductions are not as great as they once were,” Goff said. “As premiums increase, employers naturally opt to put their contributions toward premiums first and will slowly reduce their HSA funding to the point where, in some cases, it becomes entirely the employee’s responsibility.”
The deductible amount, the employee premium contribution, the out-of-pocket maximum, and whether there are other types of plans offered will also impact an employer’s HSA contribution strategy, says Mark Sherman, Principal of LHD Benefit Advisors, another UBA partner firm.
Devenir said last month that the number of health savings accounts jumped 29 percent as of the end of 2014, reaching 13.8 million.
UBA found that smaller firms are the most generous when it comes to HSA contributions.
Smaller employers (those with 1 to 50 employees) are exceeding the average HSA contribution for singles, while larger employers (50 to 1,000-plus employees) have been less generous, UBA said. Even larger employers, those with 1,000-plus employees, show the lowest average contribution at $426. Similarly, for families, HSA contributions by smaller employers tend to be above the average $890 contribution, while large employers fund an average of $760.
The trend, Goff said, likely stems from smaller companies to make more personal decisions about their employees and benefits.
The UBA survey also found:
- California has the most generous HSA contributions ($808 for singles and $1,316 for families) yet the lowest enrollment in CDHPs: only 11.3 percent of plans in California are CDHP plans and only 8.1 percent of employees are enrolled in them.
- New England, which typically has the most generous health care packages overall, sees average HSA contributions of $685 for singles and $1,342 for families.
- By industry, construction, health care/social assistance, mining/oil and gas extraction, retail and wholesale provide the lowest HSA contributions for singles and families. Government employees have the most generous HSA contributions ($791 for singles and $1,431 for families).
For its research, UBA surveyed 9,950 employers sponsoring nearly 17,000 health plans nationwide.