A first-of-its-kind study on Health Savings Accounts (HSAs) has found that online enrollment technologies, a company contribution to the HSA and thorough communications about the benefit design are all factors that encourage employees to open and fund their HSAs.

The analysis, conducted by UnitedHealth Group, examined the saving and spending patterns of 25,000 individuals enrolled in HSA plans from employers using an integrated health and financial strategy that included the above components. Results showed that a majority of those individuals, who had an HSA for the full 12 months of 2005, open the bank account, contribute their own funds and carry balances over from year to year.
 
"This data reinforce that consumers, when given the proper support, are increasingly more comfortable with the HSA model and are better understanding the advantages of saving early on for future health care expenses," said Tracy Bahl, CEO of Uniprise, the UnitedHealth Group business that manages its consumer-driven health programs.
 
When paired with the company's June 2006 study, which showed individuals in a consumer-driven health plan had an increased level of preventive care, lower overall costs and decreased utilization without adverse effects on health outcomes, the data is beginning to establish a clear pattern of how account-based plan designs are supporting health care affordability and quality.
 
Key insights from the latest analysis include:
 
Integrating the health plan and bank account increases the rate of account openings:

• According to the national average, about 60 percent of consumers in an HSA-eligible plan open the bank account. However, among the population studied for this analysis, the account opening rate was much higher (84 percent) because the employers use an integrated model;
• The greatest single influence on the account opening rate is whether employer funding is provided; 91 percent of consumers open the account when their employer makes a contribution.

Both individuals and their employers  are contributing to the accounts:

• About 70 percent of UnitedHealth Group's employer clients contribute to their employees' HSA;
• The average employer contribution was $895;
• 67 percent of consumers added their own funding to the bank account;
• Individuals deposited an average of $1,206/year to their accounts;
• The combined employer and employee contributions covered 65 percent of the deductible on average, minimizing a consumer's out-of-pocket costs.

Consumers are using the accounts as a savings tool:

• 86 percent of individuals carried an HSA balance into 2006;
• The average account balance was $815 at the end of 2005.

Lower income consumers show just as much interest in opening and funding their HSA:

• 80 percent of eligible low-income individuals (earning less than $25,000/year) opened an HSA; 
• 56 percent of low-income account holders made their own contributions to the account;
• 80 percent of these individuals carried a balance into 2006, with an average balance of $761;
• The motivation and ability of these consumers to open and fund their accounts is directly related to the employer's decision to fund the account.


Reprinted from the Spring 2007 Hub Magazine. All rights reserved. No part of this publication may be reproduced in any form without prior written permission from UnitedHealth Group. To view more articles, visit http://www.hubmagazine.net/