Although consumers seem to recognize the importance of prioritizing health insurance as a workplace benefit, they are decidedly less engaged when it comes to long-term healthcare savings. This is particularly true among those age 18-24 who prefer short-term perks in the workplace. Learn what the younger generation prioritizes and how much money they could be missing out on as a result.
HSAs and 401(k)s are both great investment vehicles. But, when it comes to healthcare expenses in retirement, there is a clear winner. Read more to see the compelling tale of two investments. Starting with a $100,000 account balance at age 40 and assuming a moderate annual growth rate of 10% with no further contributions, Mindy, the HSA participant, is able to accumulate $300,000 more than Mark, the 401(k) contributor, after he pays his taxes.
Consumers refuse to accept the truth when it comes to their healthcare finances. Whether it is fear of the unknown, distrust of the industry, lack of interest or knowledge, the reality is that consumers aren't planning for their healthcare present and future.
The movement toward cultivating a healthcare savings mentality is still very much in its infancy. While there is a lot of work to be done to help consumers better understand the benefits of HSAs and to guide them toward better investment strategies, market trends show there is a huge opportunity for health plan administrators and employers to take a proactive approach to provide advice and education that will increase consumer confidence in healthcare savings.
With healthcare costs on the rise, it comes as no surprise that employers who offer CDH products (like HSAs, FSAs or HRAs) are looking for creative ways to engage their employees to create awareness and increase adoption. These healthcare saving and/or investment vehicles help to ease the burden of increasing expenses while enabling both employers and employees to move with the market shift toward consumerism.
These marketplaces offer an affordable and efficient alternative to employers who want to offer benefit programs to workers without carrying the administrative burden and cost of managing different health coverage types. Under private exchanges, participating employers typically extend a defined contribution to workers, the proceeds of which can be used to shop among different plan types offered by the exchange.
New data from consulting firm Aon Hewitt, which currently runs a multi-carrier private exchange, released a new report indicating that when employees are given more choice and control over their health plan options, they become more engaged and invested in selecting the health benefits that work for them.
A recent analysis in Business Finance magazine noted that it's crucial for employers who are on the fence about whether to stick with a managed plan or switch to a CDHP to understand the impact of employee engagement on costs.