Seven Reasons HSAs are Taking Off

There’s no question that HSAs are growing — but why? Experts point to a number of possible explanations.

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Feds Protect HSA Plans Against PPACA Fears

The Internal Revenue Service is trying to keep worries about preventive services benefits rules under PPACA from rattling the health savings account program.

The IRS protected HSA-compatible plans with a notice, IRS Notice 2013-57, that irons out conflicts between the HSA program preventive services rules and the Patient Protection and Affordable Care Act preventive services package rules.

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More Employers To Offer Only CDH Plans in 2014

More than one in five, or 22%, large employers plan to offer their workers only consumer-driven health plans in 2014 as a cost-control strategy, according to a recent survey of 108 employers by the National Business Group on Health, Modern Healthcare reports. By comparison, 19% of employers offered only CDHPs this year, while about 7% did so in 2009.

According to Modern Healthcare, the appeal of CDHPs for employers is that high-deductible plans are less costly than more-traditional plans, like preferred provider organization plans. Data released last week from the Kaiser Family Foundation show that the average cost of family coverage through CDHPs is nearly $1,500 less per employee than PPOs.

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Satisfaction with CDHP on the Rise

Satisfaction levels are rising for Americans with consumer-driven health plans just as satisfaction — as well as popularity — slip for traditional health plans, according to new research from the nonpartisan Employee Benefit Research Institute.

Consumer-driven health plans — and their associated products, such as health savings accounts — are becoming more popular among both employers and employees.

According to analysis from the American Association of Preferred Provider Organizations, enrollment in consumer-directed health plans grew by 19 percent in 2012, increasing from 33 million in 2011 to 39 million last year.

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Acclaris Innovation Empowers Health Care Consumers

As deductible and co-pay amounts continue to grow in employer-sponsored health care plans, employees are taking greater advantage of the so-called account-based plans that help them pay for deductibles and co-pays with dollars that are set aside in a tax preferred account. Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs) are helping millions of Americans save money on their out-of-pocket health care expenses.

However, the IRS requires that dollars claimed from these types of plans be approved, or “substantiated” by a third party administrator (TPA) who insures that they meet the requirements of a qualified medical expanse. In most instances, the TPA will require the employee to submit a receipt so the claimed expense can be verified.

The increased use of debit cards associated with these types of accounts has eliminated the need for some of this paperwork, but has created its own set of substantiation challenges. While the cards are able to “auto substantiate” many of the transactions that occur at drug stores and physician offices, some purchases still need to be verified manually by the TPA and this requires the employee to submit a receipt for money that has already been disbursed from the plan.

That happens if the employee no longer has a receipt, or if the purchase does not qualify as a medical expense? In most cases the employer must find a way to collect the non-substantiated amount from the employee, or add the amount as taxable income onto the employee’s W2 at the end of the year. Both of these alternatives create additional paperwork for the employer, and a potentially negative experience for the employee.
Now there is a better way to deal with these unsubstantiated debit card claims. Acclaris, a platform and business service provider leader that enables its clients to transform the way they offer and administer consumer-driven health and reimbursement accounts, has introduced an industry leading claims offset feature that allows the consumer to use yet unclaimed dollars to offset the amounts that were previously claimed, but for which the consumer does not have a valid receipt.

With this new feature, which is available online and on mobile devices, Acclaris enables its client’s consumers to make their own decisions about how to seek reimbursement for eligible expenses. Additional paperwork and potential embarrassment is eliminated as consumers can simply choose to scan and upload images of previously unclaimed paper receipts / EOBs, or use the portal to designate currently unclaimed carrier claims to offset previously unsubstantiated transactions.

About Acclaris, Inc: Through our clients we serve more than 1.8 million active account holders. Acclaris enables our clients to transform the way they offer and administer consumer-driven health and reimbursement accounts, maximizing their revenue and profit opportunity. Our integrated end-to-end operations, consumer focus and true private label approach help our clients increase revenue and lower costs, while delivering market leading CDH products and services under their own brand.
To learn more visit the Acclaris website at

UMB Healthcare Services Launches Innovative Toolkits to Help Employers Implement and Communicate Benefit Plans

KANSAS CITY, Mo.–(BUSINESS WIRE)–UMB Healthcare Services, a division of UMB Financial Corporation (NASDAQ: UMBF), announced today the launch of three comprehensive toolkits to help employers successfully implement and communicate high-deductible health plans (HDHP) with health savings accounts (HSAs). Developed in partnership with Benz Communications, a leading HR and benefits communication strategy boutique, the UMB Toolkits provide implementation, launch and ongoing communication tools to better enable clients to educate employees, while meeting their goals for HDHP with HSA adoption and use, and empowering employees to become smart health care consumers.

“Realizing the benefits of these plans means effectively educating employees to overcome the hurdles to participant adoption. The UMB Toolkits will set a new industry standard for giving employers and individual account holders the information they need to manage their well-being.”

UMB Healthcare Services developed these toolkits to help overcome the two major hurdles to successful adoption: a lack of adequate understanding of the administrative mechanics of establishing HSA-compatible plans and a lack of effective employee communication to garner adequate participation rates. In a recent Aetna-sponsored poll of human resource professionals by the Society for Human Resource Management (SHRM), more than half of respondents were not comfortable with their level of knowledge about these types of plans. Additionally, 77 percent of respondents reported that they found it challenging to engage employees in getting the best value from their plans, and to encourage them to focus on their health and wellness.

With open enrollment now underway and HSA enrollment on the rise, the need for communication support is particularly evident. America’s Health Insurance Plans (AHIP) revealed that as of January 2011 more than 11.4 million Americans are now covered by HSAs in conjunction with high-deductible health plans, a 14 percent increase from 2010.

“High-deductible health plans with HSAs provide employers with the much-needed ability to better engage employees in their health, wellness and financial preparedness to meet current and future needs,” said Dennis Triplett, CEO of UMB Healthcare Services. “Realizing the benefits of these plans means effectively educating employees to overcome the hurdles to participant adoption. The UMB Toolkits will set a new industry standard for giving employers and individual account holders the information they need to manage their well-being.”

The UMB Toolkits were developed to support and enhance communication throughout the open enrollment process and beyond:

  • Implementation Toolkit – Tools and resources to help employers understand exactly what to expect and provide support in designing their HDHP with HSA.
  • Launch Communication Toolkit – Comprehensive tools needed to successfully launch and garner high enrollment in a HDHP partnered with an HSA, including best practices, planning guides, timelines and a variety of communication templates.
  • Ongoing Communication Toolkit –Helps employers continue to educate employees and families, and promote benefit programs year round, to ensure satisfaction with benefits.

“We’re delighted to have the opportunity to partner with UMB Healthcare Services in creating these innovative education and communication tools for companies focused on introducing HSA-compatible health care plans,” said Jennifer Benz, Founder and Chief Strategist of Benz Communications. “Our signature employee-focused approach is built into the UMB Toolkits, providing employers with everything they need to successfully implement, launch and propel ongoing engagement in a high-deductible health plan with an HSA.”

About UMB:

UMB Financial Corporation (NASDAQ: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, asset management, health spending solutions and related financial services to commercial, institutional and personal customers nationwide. Its banking subsidiaries own and operate banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. Subsidiaries of the holding company and the lead bank, UMB Bank, n.a., include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company’s proprietary mutual funds and investment advisory accounts for institutional customers. For more information, visit or follow us on Twitter at @UMBFinancial.

About Benz Communications:

Benz Communications is a benefits communications strategy boutique creating integrated employee benefits campaigns for employers committed to nurturing high-performing and satisfied employees. Benz Communications’ clients include Fortune 500 companies, Fortune 100 Best Companies to Work For, and small- to mid-size companies. Additional information about Benz Communications may be found at


Med-Vantage Launches Integrated Member Out-of-Pocket Cost Estimator

Med-Vantage® Inc — a healthcare software solutions company, offering innovative and distinctive solutions for consumer transparency, provider performance management, and personal health management — today announced the release of their Member Out-of-Pocket-Cost Estimator. BlueCross BlueShield of South Carolina is the first customer to launch the solution, delivering it as a standalone tool as well as integrating the members’ costs into their Doctor and Hospital Finder, built on the Med-Vantage HealthSmart Enhanced Provider Directory™, a web-based provider search tool.

The Out-of-Pocket Estimator is a web-based Med-Vantage cost analytic module that helps members understand “what is this going to cost me?” The Out-of-Pocket Estimator calculates an estimate of a member’s out-of-pocket expenses for a given procedure by applying the applicable real-time benefits of the member’s specific plan to the calculated cost range.

BlueCross is one of the first of the Blue Cross Blue Shield companies to run the Out of Pocket Estimator, based on the Blue Cross and Blue Shield Association’s National Cost Comparison Tool (NCCT) data, covering Association-defined treatment categories. This vital transparency information is fully integrated into BlueCross’ Doctor and Hospital Finder, which already provides their members with sophisticated hospital and doctor search capabilities as well as hospital quality data. “With consumers paying a larger share of healthcare costs than ever before, we felt that providing personalized cost information specific to a member’s plan and chosen provider was a critical next step,” said Laura Long, M.D., MPH and V.P. of Clinical Quality and Health Management for BlueCross.

Med-Vantage adds the Member Out-of-Pocket Estimator to its current list of clinical cost and quality analytics for a wide variety of transparency, member profiling, and provider performance measurement needs. Because most out-of-pocket calculators in existence today are designed for hospitals or providers at the point of service, they display cost information at the billing code level for a given provider – which members don’t understand. The Med-Vantage offering displays estimated costs for specific conditions, surgeries or procedures and is calculated based on a typical ‘service profile’ for the condition, surgery or procedure.  The service profile is a unique part of the Med-Vantage analytics engine that breaks a given procedure down into its components services and their associated costs, and then applies those costs against the member’s benefit structure. For example, the cost for a colonoscopy would include costs for the procedure itself, the anesthesiologist, and the actual facility providing the procedure room.

“With the growth in consumer-directed healthcare and the passage of healthcare reform, we’re seeing more and more payers seeking ways to aid members in their healthcare decision-making and planning,” said Peter Goldbach, MD, President and CEO of Med-Vantage.  “By adding the Out-of-Pocket Estimator to their provider directory, BlueCross BlueShield of South Carolina further extends their ability to engage consumers in actively managing their care and making choices that can significantly reduce their out-of-pocket costs.”

The Out-of-Pocket Estimator can be integrated into the HealthSmart Enhanced Provider Directory or be implemented as a stand-alone tool. In addition to applying costs to the Blue Cross and Blue Shield Association NCCT treatment categories, the solution also calculates estimates for 450 Med-Vantage-defined conditions, surgeries and procedures.

BlueCross BlueShield of South Carolina is an independent licensee of the Blue Cross and Blue Shield Association.

About Med-VantageMed-Vantage is software solutions company focused on driving improved healthcare by providing easy to use consumer transparency and provider performance management solutions that effectively engage users and support smart value-based choices. Founded in 2001, Med-Vantage is a California-based privately held company that is majority owned by a consortium of Blue Cross and Blue Shield licensees called BP Informatics, LLC. Plans participating in the alliance include Arkansas Blue Cross and Blue Shield, Blue Cross and Blue Shield of Florida (through its subsidiary Navigy, Inc.), Blue Cross of Massachusetts, Blue Cross and Blue Shield of North Carolina (through its subsidiary NobleHealth, Inc.), Health Care Service Corporation, and Highmark Blue Shield Inc

CIGNA CDHP Study Shows How Americans Can Reduce Their Health Care Costs Without Compromising Care

When Americans engage in health-smart habits such as participating in health coaching and disease management programs, substituting generic medications for brand name drugs and avoiding unnecessary trips to the emergency room, their total medical costs went down 15 percent — an average $358 per person in the first year — according to a new multi-year study comparing the health care claims experience of 897,000 CIGNA customers in consumer driven health (CDH) plans, PPOs and HMOs.

The 2010 Fifth Annual CIGNA Choice Fund Experience Study findings show individuals covered by CIGNA Choice Fund CDH plans improve their costs without compromising care by becoming more engaged in improving their health and by becoming informed health care consumers:

  • Health coaching and disease management program participation: CIGNA CDH plan customers are up to 19 percent more likely to participate in the CIGNA Health Advisor® health coaching program compared to those enrolled in a traditional plan. Individuals with chronic illnesses covered by CDH plans are 21 percent more likely to participate in their plan’s disease management program.
  • Generic medications: CIGNA CDH plan participants who also have CIGNA Pharmacy Management benefits choose generic equivalent drugs 70 percent of the time.
  • Avoiding Unnecessary ER visits: The study also shows that CDH plan enrollees use the emergency room at a 13 percent lower rate than individuals who have HMO and PPO plans. When CIGNA Choice Fund customers visit an urgent care facility, their doctor’s office or convenience clinic instead of the ER, they saved an average of $800.
  • Informed choices: Customers enrolled in a CIGNA CDH plan are more likely to use online information and tools through; use of myCIGNA increases by 40 percent when customers are enrolled in a CDH plan. The study also shows CDH plan enrollees are five times more likely to complete a health assessment compared to those enrolled in a traditional plan.

One company that is realizing the benefits of CIGNA Choice Fund plans is Starwood Hotels & Resorts. According to Starwood Executive Vice President and Chief Human Resources Officer Jeff Cava:

“Starwood is demonstrating that by giving our associates affordable health plan choices supported with education and health advocacy resources to help them make better health care decisions, people will make good decisions about their health and wealth. Early on it has become clear that more Starwood associates are using their preventive benefits, increasingly choosing generic medications over costlier brand names and taking advantage of free preventive prescriptions through CIGNA Home Delivery Pharmacy. Moreover, our associates are literally “buying into” their plans — with 83 percent contributing their own pre-tax dollars to their health savings accounts.”

As with previous CIGNA studies, the Fifth Annual CIGNA Choice Fund Experience Study confirms that CDH plans reduce health care costs relative to other types of plans without compromising care or shifting costs to employees:

  • Immediate and sustainable cost savings: CIGNA CDH medical costs are 15 percent lower than traditional plans during the first year, cumulative cost savings rise to 18 percent in the second year, 21 percent in the third year, 24 percent in the fourth year, and 26 percent in the fifth year.
  • Higher levels of care: New CIGNA CDH customers had the same or better statistical compliance with 400 evidence-based medical best practice measures than their counterparts in traditional plans, and compliance among CIGNA CDH customers is 14 percent higher for those enrolled in CDH plans for multiple years. Moreover, CDH customers sought preventive care 8 to 10 percent more frequently than those enrolled in a traditional plan.
  • Less cost for those with chronic conditions: Medical cost trend was substantially less for CIGNA CDH customers with joint disease (21 percent less), diabetes (8 percent less) and hypertension (7 percent less), than for individuals with any of those diseases in traditional CIGNA health plans.
  • No cost-shift from employers to employees: CIGNA CDH customers with health reimbursement accounts paid out of their own pockets an average of $35 less per year compared to customers in traditional plans, demonstrating that savings can be achieved without cost shifting; also the percentage of total cost was the same for both men and women.

“Our studies have consistently shown individuals in CIGNA Choice Fund plans reduce their annual health care costs without compromising care, and now the data are rolling in showing why,” explains CIGNA Chief Medical Officer Jeffery Kang, M.D. “The evidence is clear. Given the right incentives, the right health improvement programs, useful cost and quality information, and easy-to-understand correspondence, individuals are making rational, wise and successful health care decisions.

“Perhaps because most individuals covered by CIGNA Choice Fund plans are receiving the same or better levels of care for lower cost, 83 percent of those surveyed report that they are “satisfied” or “very satisfied” with the service for their CDH plans – slightly higher than the 82 percent satisfaction rate across all of our health plans.”


CIGNA (NYSE:CI), a global health service company, is dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioral health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, through 60 million customer relationships with individuals in the U.S. and around the world. To learn more about CIGNA, visit

Aon Says a Majority of Employers with Consumer-Driven Health Plans Prefer Health Savings Accounts.

Of employers who offer a consumer-driven health plan, Health Savings Accounts (HSAs) continue to be the preferred funding choice among organizations, according to a survey released today by Aon Consulting, the global human capital consulting organization.

Of the 370 survey respondents, 44 percent of employers currently offer a consumer-driven health (CDH) plan to employees, which is similar to last year but significantly higher than in 2006 when only 28 percent of employers offered this type of plan to their workforce. Of those offering CDH plans this year, 56 percent are now using the HSA model, 35 percent of organizations are using the Health Reimbursement Arrangements (HRA) model, and 9 percent use both.
Aon reports that over the last three years, the gap has widened between HSAs and HRAs, as the number of employers offering HSAs has gone from 48 percent to 56 percent, and the number offering HRAs has dropped from 43 percent to 35 percent. The following chart reflects this trend:

Percentage of employers offering HSA and HRA plans
Year�������������������� HSA����������������� HRA
—-�������������������� —����������������� —
2009�������������������� 56%����������������� 35%
2008�������������������� 49%����������������� 38%
2007�������������������� 48%����������������� 42%
2006�������������������� 48%����������������� 43%

“HSAs have grown in popularity relative to HRAs since HSAs are considered more advantageous to the employee than an HRA,” said John Zern, U.S. Health & Benefits Practice Director with Aon Consulting. “With an HSA, employees can contribute their own money, the account is owned by the employee and is portable at termination of employment. HSAs also have great tax advantages.”

Additionally, the survey found the majority of employers (83 percent) offer the HSA or HRA as an optional plan, while the remaining 17 percent have implemented a total replacement CDH program where the only plan choices offered to employees are CDH plans.

“Although only 17 percent of employers offer a total replacement CDH program, we expect that number to increase next year,” said Bill Sharon, National Consumer Driven Health Care Practice leader with Aon Consulting. “In response to the economic downturn and double digit health care cost increases, employers are becoming more aggressive in managing their health care costs. Implementing a total replacement CDH program is one of the leading health care strategies available to employers.”

The survey also found that more employers who offer the HSA plan are contributing money to the plan (66 percent versus 60 percent last year). The breakdown of this group is as follows: a flat dollar amount of less than $500 per person (15 percent), a flat dollar amount of $500 or more (45 percent), and a matching employer contribution (6 percent).

Meanwhile, employers offering an HRA plan make a wide variety of contributions to the account for a single employee: 4 percent provide less than $300; 11 percent provide between $300 and $499; 49 percent provide between $500 and $799; 1 percent provide between $800 and $999; and 34 percent provide $1,000 or more.

Employer opinions on the future of the CDH concept are still split, but opinions have improved in the past three years. The survey found 45 percent believe CDH plans will be successful in controlling employers’ health care costs in five years, compared to 39 percent of employers in 2006; 26 percent do not believe they will be successful, down from 30 percent in 2006; and 29 percent don’t know the impact it will have on health care costs, down from 31 percent who had that perception three years ago.

“The outcome of national health reform could influence the future of CDH plans,” said Tom Lerche, U.S. Health Care Practice Leader with Aon Consulting. “In particular, the proposed minimum plan design requirements could impact CDH plans offered through the proposed Insurance Exchanges, and could over time, impact CDH plans offered outside the Exchanges.

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House Healthcare Bill Would Impact HSAs.

Nancy Pelosi

The massive healthcare reform bill unveiled today by top House Democrats contains a couple of provisions that will impact those with Health Savings Accounts (HSAs).

Section 531of the bill limits nontaxable reimbursements from Health Savings Accounts (HSAs) for drugs and medicines. After December 31, 2010, except for insulin, a prescription will be required in order for the purchase of drugs and medicines to be reimbursable. This change would also apply Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).

A second change that will impact HSAs is in Section 533. This provision will increase the penalty for nonqualified distributions from Health Savings Accounts from 10 percent to 20 percent. It will likewise apply to taxable years after December 31, 2010.

CNN reported that the House Democratic leadership is working to post the text of the final bill online early next week and has agreed to give members 72 hours to read it before a vote. Under that timetable, the House would begin debating the bill at the end of next week.