These 4 industries are leading the way in HDHP adoption

From BenefitsPro

The uptake of high-deductible health plans across industries ranges considerably, according to Benefitfocus Inc.’s report, “State of Employee Benefits – Industry Edition.”

Employers in the education, health care, manufacturing and retail sectors are using a variety of tactics to drive selection of HDHPs, with varying levels of adoption from employees, so says the report, based on anonymous employee benefit election data on the Benefitfocus Platform from more than 540 large employers in those sectors.

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UMB Releases Industry’s Most Advanced HSA Reporting Tool

KANSAS CITY, Mo., Sep 19, 2013 (BUSINESS WIRE) — UMB Healthcare Services, a division of UMB Financial Corporation, introduces HSAWorks(TM), the industry’s most-advanced reporting and first-ever analytics tool that allows brokers, third party administrators, health plans and employers to analyze health savings account (HSA) data to achieve desired plan results.

In addition to HSAWorks(TM), UMB provides its clients a Benefits Communication Toolkit that, paired with the reporting tools, gives employers specific guidance and materials to help in driving their HSA communication strategy and influencing employee health.

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The Coming Revolution in Consumer-Driven Care

There is a new industry of “CDHC account administration firms” to manage these accounts and provide support services. [CDHC=Consumer Driven Health Care.]

These firms offer integrated platforms for the three accounts and support consumers with website management, debit and credit cards, and increasing cost and quality information. …these CDHC firms are taking over private insurance.

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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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Health Savings Accounts Rise to More Than $11.7 Billion in Total Deposits in June

MINNEAPOLIS–(BUSINESS WIRE)–Health Savings Accounts (HSAs) rose to more than $11.7 Billion in June according to a survey and resulting research report conducted by Devenir, an investment firm that specializes in providing investment options for HSAs.

“As we continue to conduct the survey we are finding interesting data points on the HSA marketplace that have not been previously reported at an industry level”

The survey data was collected in July, 2011 and primarily consisted of the top 50 custodians in the health savings account market, with all data being collected for the June 30th period. “As we continue to conduct the survey we are finding interesting data points on the HSA marketplace that have not been previously reported at an industry level,” says Eric Remjeske President and Co-Founder of Devenir.

Key Findings from the Devenir June 2011 survey and research report:

  • Rapid growth. HSAs continue to see strong growth as the total number of HSA accounts rose to 6.3 million with assets totaling $11.7 billion, a year over year increase of 28% for accounts and a 31% increase in assets, as well as 17% growth in assets so far in 2011.
  • Largest custodians hold significant market share. The top 5 custodians hold over $5.3 billion in HSA assets amongst almost 2.7 million accounts, accounting for 45% of all HSA assets.
  • Average account balance grows. The average account balance in 2011 grew to $1,845 from $1,640 at the end 2010, a 12.5% increase. When you eliminate identified zero balance accounts that average rises to $2,016.
  • Contributions and Withdrawals. HSA custodians retained 20% of customer contributions over the past year1.
  • HSA investment dollars continue to grow. HSA investment assets reached an estimated $860 million in June, a 60% year over year increase and are projected to reach $9.1 billion by end of 2015. The average investment account holder has a $12,462 average total balance (Deposit and investment account).

“The industry continues to see strong growth as both employers and individuals recognize the financial and consumer benefits of an HSA,” according to Jon Robb, Lead Research Associate with Devenir. Devenir projects the HSA market to reach $47.3 billion in assets by the end of 2015, a 37% CAGR over the next five years2. Devenir also projects that HSA investment dollars will continue to grow quickly as health savings account user’s balances become larger, representing 19% of all HSA assets by the end of 2015.

1 Estimate derived from Midyear 2011 Devenir HSA survey, press releases, previous market research, and market growth rates.

2 CAGR stands for Compound Annual Growth Rate. Projections are barring any dramatic regulatory or market environment changes.

Forward-looking statements are based on current expectations and assumptions based on historical growth, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances.

About Devenir

Devenir, a full-service broker dealer and registered investment advisor based in Minneapolis, is a national leader in providing customized investment solutions to the HSA Custodian marketplace. As an independent investment firm, Devenir offers a host of investment options to suit the unique needs of employers, banks, third party administrators and plan participants. Devenir provides user-friendly and cost-effective investment platforms by integrating quality investment choices with streamlined administrative processing. This solution allows any bank or third party administrator to attach a robust back-end investment option to most health benefit plans.


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.

For more information on Aon, log onto

IRS Announces 2010 HSA Limits

The Internal Revenue Service (IRS) has announced the 2010 inflation adjusted amounts for health savings accounts (HSAs) in Revenue Procedure 2009-29.

Annual contribution limitation. For calendar year 2010, the annual limitation on deductions under a high deductible health plan is $3,050 for an individual with self-only coverage, and $6,150 for an individual with family coverage.

High deductible health plan. For calendar year 2010, a “high deductible health plan” is defined under 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,200 for self-only coverage or $2,400 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage

This revenue procedure is effective for calendar year 2010.

8 Million People Now Covered by HSA-Qualified Health Plans

An annual census by America’s Health Insurance Plans (AHIP) of U.S. health insurance carriers released this week shows that the number of people covered by health savings accounts/high-deductible health plans (HSA/HDHPs) totaled 8.0 million in January 2009. This is up from 6.1 million in January 2008, 4.5 million in January 2007, and 3.2 million in January 2006.

The survey, which polled virtually all private health insurance carriers in the HSA/HDHP market, not only continued showed robust growth but growth within all segments of the market. Between January 2008 and January 2009, the fastest growing market for HSA/HDHP products was large-group coverage which rose by approximately 35 percent, followed by small-group coverage which similarly rose at 34 percent.

Likewise the gender of those adopting this form of coverage was evenly split with fifty-two (52) percent male and forty-eight (48) percent female participants.

Enrollment in the individual market also rose. As of January 1.8 million individuals were covered by HSA/HDHPs, up from 1.5 million covered lives in January 2008, and fifty-three (53) percent of all individual market enrollees-including dependents covered under family plans-were aged 40 or older.

The states with the highest levels of HSA/HDHP enrollment were California (854,000),

Florida (524,000), Illinois (497,000), Texas (476,000), Ohio (464,000), and Minnesota

(388,000).The highest premiums for HSA/HDHPs were reported in Massachusetts where they averaged $361 for single coverage and $925 for family coverage. The lowest priced plans were found in North Dakota where they averaged $210 for single coverage and $461 for family coverage.

Health savings account (HSA) plans give consumers incentives to manage their own health care costs by coupling a tax-favored savings account used to pay medical expenses with a high-deductible health plan (HDHP) that meets certain requirements for deductibles and out-of-pocket expense limits. Most HDHPs cover preventive care services (e.g., routine medical exams, immunizations, well-baby visits) without requiring the enrollee to first meet the deductible. The funds in the HSA are owned by the individual and may be rolled over from year to year. HSAs were authorized starting in January 2004.

Read the entire report here:

Healthcare Reform Already at Hand

Despite all the talk coming out of Washington for the need to radically reform healthcare, news continues to trickle to the surface about the success of consumer-driven health plans, especially those that utilize Health Savings Accounts (HSAs).

A report released this week by Canopy Financial, a company that supplies healthcare banking technology, said that account balances in HSAs continued to grow in 2008, despite the downturn in the economy. The report also noted that employee contributions to HSAs significantly outpaced employer contributions.

“What we’ve seen throughout 2008 is that consumers who select HSAs to manage their healthcare spending are not simply using these accounts to pay for their immediate healthcare needs. They are also funding their HSAs above and beyond their employer contributions and using them as long term savings and investment vehicles,” said Vik Kashyap, CEO of Canopy.

The report indicates that individual HSA balances increased 33%, and family HSA balances increased about 12% between the first quarter and fourth quarters of 2008.

In the fourth quarter, employees contributed an average monthly payment of $206 for a family account, while employers contributed $133.

Individual accounts fared similarly; Employees contributed $111 on average, while employers contributed $69.

Another article appearing in The Wall Street Journal warned that if you’ve lost your job, or think you’re at risk of that happening, you need to pay attention to any money you’ve been stashing away in a flexible spending account for medical expenses.

The article notes that workers who think there’s a risk of job loss, should take steps to spend the money they have already set aside on qualified medical expenses. Otherwise, they could lose those dollars if a lay-off occurs.

The article was quick to note that a job loss doesn’t have that same impact on money in a health savings account, a separate type of tax-advantaged savings account that is typically used in conjunction with a high-deductible insurance plan.

HSAs are more like 401(k) retirement plans in that if people lose their jobs, they get to keep the assets in these accounts when they leave. There’s no annual requirement to “use it or lose it,” as with the money in an FSA.

Perhaps we need to take a close look at what is already working before we charge off to fix what might not be broken.