Created in 2004 in order to help lower health care costs, health savings accounts have recently gained traction. More employers are moving to consumer driven health care plans, according to industry sources, and offering the tax-advantaged HSAs in conjunction with high-deductible health plans.
Avidia recently announced a new partnership with Alegeus Technologies, driven by their desire to continue to enhance and grow their existing HSA program. By leveraging the Alegeus HSA platform, Avidia is able to deliver a best-in-class HSA solution to market – giving them clear points of differentiation relative to competition, and enabling them to win new customers
Feedback from the market is clear, when it comes to HSA custodians, consumers and employers value choice. HSAs are an individual account that is portable and intended to follow consumers from employer to employer to address their long term healthcare spending and savings needs. Therefore it stands to reason that consumers might have strong opinions about the custodian that manages those funds
Alegeus offers the industry's only single, wholly-owned technology platform to handle benefit account administration, benefit debit card processing and HSA recordkeeping.
Several studies have emerged highlighting that many Americans are in danger of facing financial shortfalls during their retirement years. From not saving enough, to dipping into their retirement accounts during periods of hardship, a large number of workers from all age groups and demographics are likely to enter their golden years without sufficient savings.
Prior to 1978, most employee benefit packages included pension plans, whereby employers agreed to assume a significant percent of employees' retirement costs, based on their working salary – assuring that employees would receive a defined amount of money per month in retirement (a defined benefit). However, over time, this became a liability for employers, a problem that largely contributed to the economic crisis in the late 1970s.
Much attention has been given to the high deductible health plan (HDHP) value proposition for employers in reducing healthcare costs. Although, by design, these plan types shift more of the cost to consumers – it doesn’t mean that these plans are not also financially beneficial for consumers.
National healthcare expenditures reached nearly $3 trillion in 2013 – up from $2.6 trillion in 2010. This staggering figure, predicted to reach $4.6 trillion by 2020, has captured the awareness of the entire nation. Consumer directed healthcare (CDH) was conceived more than a decade ago, as a mechanism for controlling healthcare costs. The premise of CDH was simple, if consumers are made more accountable for the cost of their healthcare, then they will become more responsible healthcare consumers – and overall healthcare costs will decrease.
For many decades, the majority of Americans have received their health insurance coverage through their employers. Today, US employers spend more than $1.6 trillion per year on employee benefits for more than 149 million people. ‘Defined benefit’ has been the prevailing health benefit distribution model, whereby the employer selects a limited set of health benefit plan options to offer employees, and shoulders the majority of the financial burden and risk of healthcare costs. Rapidly rising costs are driving employers to evaluate new plan designs and distribution models in order to control healthcare expenses – including defined contribution programs.
The unsustainable growth of US healthcare costs has been well documented. In an environment where insurance premiums have outpaced wage growth and inflation every year since 1998, employers must consider how they will control healthcare costs – or if they will continue offering coverage at all. These cost drivers are prompting employers to consider alternatives to traditional employee health benefit models.