Did you know the Alegeus platform was designed to manage the unique requirements of Voluntary Employee Benefit Associations, or what is more commonly known in the market as VEBA? Alegeus clients can easily offer and administer VEBA programs leveraging their existing platform, operational infrastructure and customer engagement channels.
HSAs and FSAs seem to get all of the attention, and growth in HSAs continues to outpace HRAs, but the fact remains that HRAs have grown steadily along with HSAs and are predicted to continue to grow at a rate of 10-15% annually. This modest growth projection underscores the potential opportunity many plan administrators are leaving on the table by not fully helping employers understand reasons to consider HRAs in addition to HSAs.
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.
In much the same way that company-sponsored pension plans of yesteryear resulted in employee apathy about where retirement dollars came from and how they were invested, leading to today’s consumer-directed 401ks, company-sponsored health plans are following a similar path leading to greater adoption of HSAs.
Healthcare is becoming more and more consumer directed. We’ve all seen or experienced consumer driven health first-hand, in some way – whether it is determining which health plan is right for our family, making care decisions for a parent or loved one, receiving an unexpected bill for services, or trying to determine if a health benefit account (FSA, HSA, HRA) is the best vehicle to meet our future healthcare needs.
Long gone are the days of simply picking a benefit-rich health plan during open enrollment – essentially setting and forgetting healthcare management until the following year. With an era of consumer-driven healthcare upon us, this paradigm shift requires the modern healthcare consumer to be engaged and empowered to make the best decisions for their families and their finances.
You may not realize it from watching the news, but in June the U.S. House of Representatives was able to overcome the dysfunctional mire of Washington D.C. and took steps to enact four bills that will increase the availability and usability of account-based healthcare, especially HSAs.
On July 6, 2016, the House of Representatives passed the Restoring Access to Medication Act (H.R. 1270), sponsored by Rep. Lynn Jenkins (R-KS2) and Rep. Ron Kind (D-WI3).
The shift to healthcare consumerism is well underway. Trends continue to point to increased financial responsibility for consumers with rising deductibles, increased consumer out-of-pocket responsibilities, and accelerated adoption of consumer directed healthcare plans (CDHPs), health savings accounts (HSAs), and other account-based benefit offerings. According to Mercer, enrollment in CDHPs among large employers nearly doubled in the past three years from 15 percent to 28 percent of covered employees.
Employer adoption of these consumer-directed benefit designs will continue to grow for the foreseeable future, driven by the need for cost control, the impact of healthcare reform and the looming excise tax. The costs of providing healthcare continues to rise, surpassing $25,000 for an average family for the first time in 2016 (Milliman Medical Index).