Original post benefitspro.com
A study of some 10,000 employer sponsored plans by United Benefit Advisors of health plans revealed that about 24 percent of all health plans offered either an HSA or HRA component — a 29 percent decrease in the number of health plans nationally. That drop indicates that plan designers and health plan sponsors are still out of sync on the value of these accounts.
“Faulty plan design, in some instances, has led to smaller pricing gaps between traditional plans and HSA compatible plans,” says Steve Salinas, benefits advisor at Bridgeport Benefits, a California-based UBA Partner Firm. “Many insurers have added stipulations to their contracts disallowing employer-funded accounts in the presence of a high deductible plan.”
UBA’s data supports the overview that “enrollment and contributions to these account-based plans varied wildly based on employer size, industry, and region.”
It offered a large employer/small employer illustration of this near-chaotic situation. “While large employers typically offer the lowest contributions to account-based plans, companies with 200 to 1,000+ employees saw the most dramatic increases in enrollment, ranging from 50 to 90 percent over the last three years.”
In some respects, plan designers and consumers in California may be closer to figuring out how to design plans with HRAs and HSAs that strike a balance between the objectives of all three parties. California offers the best HRA and HSA plans for singles and families.
- California leads the country with the highest HRA contributions for singles, which average $2,288;
- California is the only region in the country that increased contributions over the last three years, making them the most generous in the nation by contributing $981 to singles and $1,789 to families;
- Families in California receive the second highest average family contribution to HRAs at $3,950, a 13 percent decrease from three years ago when they led the nation at $4,537;
- The average employer contribution to an HSA was $491 for a single employee and $882 for a family.
“In California, health insurance costs are so high that employees very often gravitate to the lowest cost options, typically the HSA-compatible high deductible plans,” says Keith McNeil, benefits advisor at Arrow Benefits Group in California, a UBA Partner Firm. “HRAs have been under health plan scrutiny due to the trend of self-insuring the high deductible through an HRA, which the health plan believes raises the cost of their plans. They have threatened penalties for non-compliance. So in the small group market, it has been much easier to simply offer HSA compatible plans and include the HSA as an option to members.”
“Large employers (1,000+ employees) have not typically offered competitive HRA or HSA plans because they are able to offer other types of more generous plans,” says Les McPhearson, CEO of UBA. “But this is the sector to watch: If they see the kind of double-digit cost increases other employer groups already have, they may have no choice but to offer more attractive HRA and HSA plans in an effort to control costs.”