What's New in 2007 for California's Health Savings Accounts

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California Broker Magazine surveyed 11 carriers in the state to get their take on the Health Savings Account market (HSA) and get specific details on their HSA offerings.

In 2007, the demand for health savings accounts (HSAs) is coming mainly from financially savvy professionals and self-employed business owners ages 35 and over. This group has the discretionary income to cover the deductible, according to a survey by California Broker Magazine. For the survey, 11 carriers in California gave brokers their take on the market and an opportunity to compare HSA offerings.

The early HSA adopters have been individuals and small groups because it's easer for them to change their benefit plans and rising healthcare costs hit them harder. The most aggressive offerings are for employee groups of two to 50. But, the 51 to 199 employee market will continue to develop in 2007.

Groups with a PPO account for more sales of high deductible plans paired with HSAs. California sales fall behind sales in other states. This is due, in part, to the high HMO penetration in California. One carrier says that it's counter-productive to pair an HSA with an HMO since HMOs limit provider choice. But, three of the companies surveyed claim success in doing so.

Consumers are using their HSAs to cover short-term medical expenses and long-term financial planning. Those who are dipping into their accounts are paying for doctor visits, drugs, dental care (especially orthodontia), and hospital costs.

Survey respondents say that, when it comes to HSAs, brokers want education and training, simple plan designs, easy enrollment, the tools to present these options to employers and employees, and the ability to submit applications online. Brokers also want higher referral fees from the HSA administrator.

There are still many kinks to be worked out with HSA eligible plans. Medical groups have new administrative challenges when it comes to deductibles. Also, getting consumers to take financial responsibility for their health services is a major challenge. One respondent said that some carriers have not priced their plans competitively.

When asked how their plans have changed from last year, carriers said they are making plans easier to use and offering more products to small groups, large groups, and individuals. They are also adding HSA investment services, providing information to members on the cost and quality of in-patient and outpatient procedures, and providing free online banking. One carrier has removed maternity benefits from its lower deductible plan options to generate more competitive prices throughout the plan.

To get the survey, visit http://www.calbrokermag.com. For more information, contact Leila Morris at 818-848-2957 or editor@calbrokermag.com

About California Broker Magazine

California Broker is the most respected insurance magazine in California with a 25-year track record of graphic and editorial excellence. The magazine has received two golden graphic awards from the American Society of Business Press Editors. The magazine has twice received the prestigious Paladin Award for service to the insurance industry from the Los Angeles Association of Health Underwriters. The Web site (http://www.calbrokermag.com) has won two Golden Web awards.

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LEILA MORRIS
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