Health Savings Accounts Work For Employers And Employees

In 2009, Aon Consulting and the International Society of Certified Employee Benefit

Specialists asked employers whether they are offering their employees consumer-driven health plans.

Of the employers surveyed who offered such plans, Health Savings Accounts were preferred over health reimbursement arrangements (HRA). Fifty-six percent of these employers used the health savings account (HSA) model, while only 35 percent used the HRA model. Nine percent said they used both types.

This trend has been growing over the last three years. As the number of employers offering a HSA has grown from 48 to 56 percent, the number offering HRA has fallen from 43 to 35 percent. The HSA model may be growing in popularity because health savings accounts are considered more advantageous for employees than HRA.

The 2009 survey also found that more employers who offer a HSA plan are contributing money to the plan. Sixty-six percent contributed in 2009 as compared to 60 percent in 2008. This trend is expected to continue because of the 56 percent of employers surveyed who did not offer consumer-driven health plans, 37 percent said they planned to offer one in the near future.

J.P. Morgan Guides Employers to Offer Health Savings Accounts

J.P. Morgan has issued "Best Practices for Implementing a Health Savings Account (HSA) Program," which provides step-by-step help for employers who want to offer their employees a HSA program. As one of the first banks to offer Health Savings Accounts, J.P. Morgan has extensive experience in the consumer-directed healthcare industry. The bank administers HSA programs for nearly 10,000 companies, and provides HSA cash and investment services for hundreds of thousands of individuals.

These best practices reflect J.P. Morgan's experience meeting the needs of companies that represent the full spectrum of American employers. That ranges from small companies with as few as two employees to firms with more than 100,000 employees.

These best practices include designing a HSA plan to meet both short- and long-term enrollment goals. Companies that are most successful in introducing a HSA plan design their plan to be easy to understand and use. Such plans typically provide 100 percent coverage for preventive care services. They usually offer a line of credit to cover unexpected medical expenses, and these employers generally contribute to their employees' Health Savings Accounts. Equally important, these employers also promote employee education about the cost of healthcare.

How to Select a HSA Administrator

HSA administrators should have the requisite expertise and core capabilities to meet both the company's and the employees' needs. Companies should choose a HSA administrator that can provide a simple enrollment process, and customizable employee communication and enrollment materials. Also, look for a HSA administrator to provide comprehensive reporting with a dedicated support team. Finally, look for a strong reputation and balance sheet.

The Need to Communicate HSA Benefits to Employees

Companies need a well planned and executed strategy to communication the benefits of a HSA plan over several months prior to the actual enrollment period. That allows employees the necessary time to fully understand their new benefits. It also reduces employee confusion during the busy enrollment period. Take advantage of professionally-developed communication tools that can answer your employees' questions and concerns about Health Savings Accounts.

By the end of 2008, there were an estimated three million Health Savings Accounts with combined deposits of more than $3 billion. The number of Health Savings Accounts is expected to quadruple by 2012. Will your company be part of that future?

by: Wiley Long

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