Employers concerned about the Affordable Care Acts excise tax continue to consider adopting high-deductible health plans with health savings accounts.
Paul Fronstin, director of the Employee Benefit Research Institutes health research and education program, explains that the decade-old HSA is seeing renewed interest due to the Cadillac tax.
[HSA use] is growing and I think maybe it didnt grow as fast as it was expected over the last 10 years but, there seems to be a renewed interest in employers [considering] adopting these plans, he says. Or, if they have adopted them, eliminating all the other plan options and only offering this plan.
The ACAs excise tax on high-value coverage is set to go into effect in 2018. Because HDHPs are lower-value plans, implementing them is viewed as one way for employers to avoid the Cadillac tax.
Fidelity Investments has seen a 48% increase in the number of HSAs opened in 2013 as more and more companies offer the accounts with their HDHPs. Assets in Fidelity-administered HSAs, meanwhile, have increased 39% to $653 million, up from $471 million in 2012.
The majority of people, we have found, would find advantages with going with an HSA plan, given that its got lower premiums, typically in the form of payroll deductions for the insurance itself, says Will Applegate, vice president of Fidelity Investments, which administers 269,000 HSAs at more than 100 companies.
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The implementation of an HSA can also bolster satisfaction among employees concerned over widespread health benefits changes that may be perceived as takeaways.
I think it makes sense from the employer perspective that if you are going to go with a high deductible [plan], you might as well make it a HSA-eligible plan even if youre not going to fund the accounts, simply to give your employees a vehicle to pay their expenses on a pre-tax basis, Fronstin tells EBN.
