HSAs Gain Ground with Mid-Size and Large Businesses

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Companies with small groups have been the early adopters of health savings accounts (HSAs), but HSAs are finally gaining ground among midsize and large employers, according to a survey by California Broker Magazine. In addition to providing a market analysis, companies answered detailed questions about their plans, giving brokers an opportunity to compare HSAs and choose the best products for their clients.

The following is a summary of insights from executives who responded to the survey. Except for public-sector clients, all market segments have been responsive to HSAs, including white collar, blue collar, and small and large size employers. Mid-market segments entered the high-definition health plan (HDHP)/HSA market in January 2005 and the large/jumbo clients are now moving in 2006 and will continue to do so in 2007.

Areas with high PPO penetration move rapidly as well. Conversion from the HMO to the high-deductible health plan is a longer-term transition. The employer usually adds it as an option rather than a total replacement with a longer-term strategy to reduce their other options over time.

The survey revealed that HSAs still have some challenges to overcome. Members need to be aware of potential overpayment if they use their debit card at the point-of-sale for services covered by their health plan. Also, the concern of Rx coverage not being permitted below the deductible is a deterrent for choosing the HSA. Many carriers will not allow preventive Rx even if allowed by the guidance due to tracking issues.

Some carriers have not priced plans competitively. There is not enough of a differential among the deductible limits, pharmacy after deductible, and out-of-pocket maximums. Also, certain carriers’ explanations-of-benefits systems are lacking in their ability to help the employee track claims below their high deductible.

To get the survey, brokers just have to visit http://www.calbrokermag.com. (Look under "Industry Surveys" on the left side of the page.) 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 24-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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