As more employers introduce employees to consumer-driven health plans with a health savings account, utilization grows of those HSAs. Last week, UMB Healthcare Services announced a growth of 36% of HSA account balances, surpassing $400 million dollars following 2011 open enrollment. The number of HSAs stood at nearly 220,000 at year-end.
UMB also saw a 37.9% growth in its debit cards associated with flexible spending accounts, health reimbursement arrangements and HSAs. Total accounts reached more than 2.4 million accounts at year-end. Dennis Triplett, CEO of UMB Healthcare Services, attributes this to two things: education and an increase in not just small, but large employers, using these plans.
“As people have these accounts and get past first year … consumers begin to see and feel that there are dollars to be saved year over year,” Triplett says. He also points to the early adopters of these plans, individuals buying insurance. “It was the only way you could afford individual insurance. Then it moved up the ladder to small employers, who eventually did full replacement.” What he saw a few years ago was larger employers moving over and at least introducing an HDHP with an HSA as an option, but still maintaining a PPO or HMO. “It takes two or three years to get employees comfortable, and it might not be hockey stick growth, but its significant growth.”
Triplett also adds the important role that employers continue to play in growing adoption of these plans by educating and taking the time to communicate to employees on the benefits of participating.
“The one thing that we’re focused on is educating and speaking to employees. We all know that typically the process followed by many employers is that they do communication once a year,” he says. He suggests that communication needs to be a year-round process, though he adds that with HR/benefits professionals’ full plates, practitioners may need to rely on pre-produced materials from their health plan. UMB offers such a toolkit to clients.
“We talk about making [employees] better consumers, but the only way you can do that is to give them information. How can we simplify it and make it more prescriptive so it’s close to being a no-brainer?’
He says the growth of medical savings account largely hinges upon developments around health care reform and if employers continue offering health insurance. He says if they do, he expects a 25% annual growth rate in the next five years.
