Health Savings Accounts Becoming Increasingly Popular

BY DAN LAROCK

Here in the Dakotas and western Minnesota, we have entered the fall season. Employers all over the region are preparing their group benefits plan offerings for open enrollment. It’s a familiar scene here, like combines and tractors in the fields. Fall open enrollments have become a big part of our culture in this region.

It’s important for employers to be well aware of the trends emerging in the benefits industry. Some major differences exist between benefits plans offered by larger employers (more than 50 employees) versus those offered by smaller employers (fewer than 50 employees).

While there are differences, there are also multiple effective benefits strategies that apply to all employers. One we’ll examine here is the Health Savings Account. Whether now or in 2017, employers should take the time to understand and then make the decision to offer a consumer-driven HSA with a qualified health plan to their employees. Across our region, people continue to ask, and at times demand, access to the kinds of tools that allow them to become increasingly involved in their own health care decisions and, ideally, wiser consumers of health-related services. They want more choices. They need more education.

Many employers and employees alike want to understand how the health care system works, so they can determine the best ways to engage with it. A consumer-driven HSA is the best place to start.

According to the 2016 Kaiser Family Foundation’s Employer Health Benefits Survey, 7 percent of employers who offered health insurance to their employees in 2006 provided them with a consumer-driven plan. In 2010, that percentage jumped to 15. Currently, that figure is at 29 percent — nearly one in three employers — regardless of size. The vast majority of these plans are HSAs. In 10 short years, this type of health plan has grown in popularity by more than 22 percent.

A 2016 study by Denevir, an investment advising and consultant firm, reveals that more than 18.2 million people currently are using HSAs. That number is 25 percent higher than in the previous year. To appreciate the size and scope of that number, consider that the combined population of North Dakota, South Dakota, Minnesota, Montana, Iowa and Nebraska is just more than 13 million. It’s a big number and getting bigger every year.

For employers who sponsor health and benefits plans in the region, a consumer-driven plan with an HSA is quickly becoming a must have. In fact, Fargo’s own Discovery Benefits is actually one of the nation’s leading providers of HSAs — and they’re right here in our backyard.

Employers should also consider including outcomes-based wellness, telephonic or virtual physician visits, working spouse provisions and new pharmacy tier spreads.

Employers should be interested in learning more about how to design these kinds of programs and offerings. Properly implemented, they are all helping to control benefits costs for many employers in this region. Seek the advice and counsel of your benefits advisor — they should be prepared to help you with both the education and implementation of these strategies. PB

Dan LaRock Principal and Shareholder SilverStone Group Sioux Falls, S.D. dlarock@ssgi.com