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HDHPs: Your Most Valuable Health Benefit Is Left Behind - ModernHealthcare.com

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In 2019, 11.4 million people selected healthcare plans through the Affordable Care Act exchanges. Though the average deductible was over $5,000—a figure high enough that one would presume the majority to be HSA-eligible, only 7 percent of plans actually were. Even then, not all eligible plans were coupled with an HSA. This signals a huge opportunity for us to alert more Americans to the unique ways an HSA can benefit them at every life stage.


JS: It’s a combination of two things: First, although the plans themselves may have a high deductible, there’s often some element of the plan that disqualifies it from being HSA eligible, so careful attention has to be paid to which accounts can be coupled with an HSA. 

Secondly, there aren’t enough people who think of an HSA as a lifetime benefit that can be taken with them from job to job and used to pay for healthcare in retirement. Instead, it’s more often understood as a plan-year decision. But just like you wouldn’t want your 401(k) one year but not the next, we have to get people to start thinking like that about HSAs, too.


JS: It’s very helpful to view healthcare consumers as being in one of several different life stages and/or on different consumer pathways when it comes to their HSA. That way you’re better able to address their individual needs. You have to consider that the behaviors of a 26-year-old who is just getting off their parents’ health insurance plan will be very different from someone over the age of 65 who is staring down retirement. 

At WEX, we’ve also identified several consumer pathways. First, you have your Investors, that 5-14 percent of HSA holders who have a lot of money in their account and are actively investing it. Then, there are your Cash Savers, who are saving plenty into their HSA, but not investing those funds for various reasons—the most likely being that they don’t know it’s possible to do so. Planners make up the third consumer category. They proactively save into their HSA in anticipation of upcoming medical expenses, but may sometimes spend their balance down to zero. Each of these consumers needs different things; Investors may benefit from tools that help them with planning and that make it easier for them to invest, whereas Cash Savers could use education that helps move them into the Investor category, for example. 


JS: We have to make coupling HDHPs and HSAs more intuitive. When you compare plans on HealthCare.gov, HSA-eligible HDHPs are identified on plan cards by an “HSA-eligible” flag in the upper left-hand corner, but the exchanges do not generally make it easy for somebody to just open an HSA. At the time that benefits are chosen, whether a consumer is on the exchange or selecting their employer-sponsored coverage, ideally a suggestion would appear that says something like, “You’ve selected a high deductible health plan. Would you now like to enroll in an HSA?” 


JS: Yes, it’s critical that they understand that an HSA is the best tax-advantaged account that you can have—even more so than a 401(k)—because the dollars go in tax free, investments grow tax free, and when you use it for qualified medical expenses, they, too, are tax free.

I also like to show people the ways that an HSA can empower them to make better health decisions for themselves and their family. As an example, I’m a Type 1 diabetic, and in the early days of continuous glucose monitors, my health plan wouldn’t pay for the actual device. One of the first things I did with my HSA was to save up money so I could buy it for myself. So instead of allowing the health plan to make the choice for me, I made the choice. That can apply to all sorts of different health conditions, which makes communication and education of utmost importance.
 


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To learn more about HSAs, read this blog post.

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