The number of employers offering health savings accounts is on the rise, but employees remain confused by them, highlighting a need for more consumer education from benefit professionals and advisers.
Tax advantages and cost savings are two reasons employers are increasingly adding HSAs to their health benefit offerings, according to Steve Neeleman, founder and vice chairman of HealthEquity. A Towers Watson/National Business Group on Health survey found in 2014 about 73% of large employers offered account-based health plans with an HSA or HRA and 82% planned to do the same this year. Only 2% of large employers offered them in 2002.
Neeleman told attendees of EBA’s Workplace Benefits Mania in Las Vegas last week that several drivers have contributed to the upturn, including a mass adoption of high deductible health plans, longer life expectancy, increased health care needs in retirement and the use of more consumer technology in health care.
Coupled with a consumer-driven high-deductible plan, Neeleman says employers can cut health care costs dramatically per employee. The combination of the two turns employees into savvy health consumers, opting for generic drugs over brand name and comparing rates for doctor visits or operations, when previously they may not have done so, he says.
Still, employees remain confused about HSAs and more education could help them utilize the accounts to their fullest intent and realize more savings for employers. The good news for advisers is most consumers prefer one-to-one conversations to improve their knowledge, according to the findings of a survey of more than 300 health care industry professionals conducted by Acclaris.
The survey found a lack of education is the biggest barrier to adoption of health savings and reimbursement accounts.
Almost all respondents (92%) rated the average consumer’s understanding of health savings and reimbursement accounts as mediocre or poor. More than half (52%) said consumers don’t grasp the long-term benefit of health savings and reimbursement accounts, while many also struggle to make the connection between health care and spending accounts. Thirty-two percent of respondents reported that understanding when an HSA can or should be used is one of the most critical gaps in consumer knowledge about consumer-driven health plan and reimbursement accounts.
“The call for improved consumer education is clear,” says Dean Mason, CEO of Acclaris. “Employers need to ensure that employees understand how to make the most of their benefits. This can only be done via continuous, high-touch engagement throughout their health care journey.”
Consumers also find the rules surrounding HSAs and HRAs to be too complex, according to 48% of the health care industry professionals surveyed. Almost half (47%) said they find the jargon too hard to understand and consumers fear making a mistake and not knowing how to correct it.
Information about HSAs should be provided to employees during the entire benefits process, respondents said.