HRA/HSA Survey for Consumer-Driven Health Care Plans
New York, NY (PRWEB) July 28, 2006
Buck Consultants, an ACS company and one of the world’s leading human resource and benefits consulting firms, announced today the results of a national survey of U.S. employers on Consumer-Driven Health Care (CDHC).
Buck’s study “HRA/HSA Survey for Consumer-Driven Health Care Plans” was conducted in the second quarter of 2006. It analyzed responses from more than 130 U.S. organizations on CDHC plans - those characterized by a High Deductible Health Plan (HDHP) coupled with either a Health Reimbursement Account (HRA) or a Health Savings Account (HSA).
Survey respondents consider the following components crucial to a successful CDHC program with an HSA:
· Aggressive and coordinated education campaigns. Eighty-one percent of survey respondents believe a key challenge in implementing a successful CDHC program is achieving true employee understanding. Companies that “strongly support” their CDHC programs experience a 17% participation rate vs. a 2% participation rate for companies that were neutral or showed only mild support.
· Employer contributions. Higher rates of participation may be achieved if the employer prefunds the HSA account at the start of the year, and the employer pays the HSA administration fees. Seventy-six percent of survey respondents contribute to employees’ HSAs.
· Claims integration. The health plan and the HSA custodian must work together to fully integrate claims payment, relieving the employee of the burden to pay providers directly from the HSA.
· Multiple investment fund choices. Ninety-two percent of survey respondents provide mutual funds or other equity-based investments.
The most frequently-cited reasons for offering CDHC plans are reduced costs (85%) and exposing employees to the true cost of health care (56%).
“The majority of employers believe health care costs will decline if employees purchase care with funds deposited into an HSA they control,” said Robert Burnett, Principal in Buck’s Health and Welfare consulting practice. “Our survey shows an increasing confidence among plan sponsors that HSAs can help drive participant behavior change.”
Respondents feel that HSAs control costs more effectively than HRAs (46% vs. 13%), and that HSAs are more attractive to employees than HRAs (52% vs. 23%).
“Clearly, the ability to invest funds held in HSAs and the fact that employees can roll over their balances when they leave employment help make HSAs more attractive than HRAs,” said Burnett.
HRA plans have been offered for two to three years longer than plans using HSAs. While 55% of survey respondents will retain their HRA plans, 30% of those with HRAs will add an HSA option, and 15% plan to replace their HRAs with HSAs.
The survey found CDHC enrollment increases as average salary increases. Companies with average salaries of more than $60,000 exceeded a 20% average participation rate - compared to an overall CDHC average participation rate of 14%.
Health Reimbursement Accounts (HRA) are employer-sponsored plans that are similar to flexible spending accounts, except that employees may roll over unused balances at year’s end. They are funded with employer dollars, not employee salary reductions.
Health Savings Accounts (HSA) are portable accounts consumers can use to pay for qualified medical expenses. Both employers and employees can contribute to HSAs. For employees, the pre-tax contributions reduce their income taxes while allowing them to set aside money for their health expenses. Employees accumulate tax-free interest on their HSA balances and do not pay any taxes when using the money to pay for qualified medical expenses. Unused HSA balances can be carried forward from year-to-year, rolled over if the individual changes jobs, or even used for post-retirement health expenses.
A recorded webcast discussing the survey results and a PDF of the presentation is available on Buck Consultants’ Web site at:
Buck Consultants, an ACS company, is a leader in human resource and benefits consulting with more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and funding some of the nation’s first public and private retirement programs, Buck is an innovator in the areas of retirement benefits, health and welfare programs, human resource management, compensation and employee communication. News and other information about Buck Consultants is available at http://www.buckconsultants.com. Buck is an independent subsidiary of Affiliated Computer Services, Inc.
ACS, a global FORTUNE 500 company with more than 55,000 people supporting client operations reaching nearly 100 countries, provides business process outsourcing and information technology solutions to world-class commercial and government clients. The Company's Class A common stock trades on the New York Stock Exchange under the symbol "ACS." ACS makes technology work. Visit ACS on the Internet at http://www.acs-inc.com.
The statements in this news release that do not directly relate to historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous risks and uncertainties, many of which are outside the Company's control. As such, no assurance can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Factors could cause actual results to differ materially from such forward-looking statements. For a description of these factors, see the Company’s prior filings with the Securities and Exchange Commission, including our most recent filing. ACS disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future event, or otherwise.
Buck’s survey “HRA/HSA Survey for Consumer-Driven Health Care Plans” is available to the media by contacting Ed Gadowski at (201) 902-2825. It is available to other interested parties for $100 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone 1-800-887-0509. It can also be ordered online at http://www.bucksurveys.com.
Edward.gadowski @ buckconsultants.com
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