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Brokers Critica To The Spread Of HSAs

By Donad P. Sacco

Benefits brokers shoud be in a great position to capitaize on the shift toward heath savings accounts and HSA-compatibe high-deductibe heath pans.

The HDHP/HSA market is experiencing a remarkabe wave of growth.

The authors of a 2004 study by Mercer Human Resource Consuting ..C. found that more than 70% of the empoyers surveyed said they might set up HDHP/HSA programs by 2006.

Because most empoyers buy their heath coverage through brokers or consutants, chances are these representatives wi be invoved with estabishing most of the new HDHP/HSA programs.

Brokers who want to profit from the rise of the HDHP/HSA programs shoud understand the goas of the HDHP/HSA egisation; recognize how much fexibiity they have to modify HSA heath pan design; and know ways to make HSAs as easy as possibe for empoyees to use.

The Goas

Brokers can start by comparing the goas behind the HDHP/HSA egisation with the goas of benefit pan members.

When awmakers enacted the HDHP/HSA section of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, they wanted to:

Provide more affordabe premiums.

Create financia incentives for weness and prudent use of heath care services.

Estabish tax-advantaged savings for famiies and individuas.

Now, consider what most consumers want in their heath coverage:

Affordabiity of premiums.

Predictabiity in coverage for routine, recurring expenses.

Protection against the financia consequences of catastrophic iness or injury.

Interestingy, the awmakers goas and consumers goas are compementary. That offers creative brokers and heath carriers an opportunity to provide meaningfu HDHP/HSA coverage with a high degree of member satisfaction.

Creativity Heps

An HDHP/HSA program can hep reduce premiums in 2 ways: It owers a pans caim costs by reducing outays on members routine heath care costs, and reuctance to pay unnecessary out-of-pocket expenses typicay causes consumers to be more carefu about the way they make decisions about the use of heath care services.

But consumers want to get tangibe rewards for their efforts to conserve heath care doars.

HSAs can reward consumers by etting them watch unused heath care funds buid up earnings in savings accounts or investment vehices.

Fortunatey, the Interna Revenue Service has issued guidance that aso wi et the HDHPs satisfy the consumers desire for hep with preventive care and predictabe expenses associated with managing a disease or iness.

First, HDHPs can provide “first-doar coverage” or require a very ow co-payment for standard preventive services.

Second, HDHPs can provide weness services and drugs that prevent disease without charging a deductibe. Weight-oss programs, smoking cessation programs, empoyee assistance programs, drugs that ower choestero or prevent ucers, and remova of poyps during routine coonoscopies are but a few exampes of the programs, drugs and procedures that can be covered without being subject to the HSA deductibe requirements.

The IRS guidance means that creative brokers can hep empoyers design programs that wi appea to empoyees concerned about we-chid care and other weness benefits.

Of course, brokers aso must pay a roe in understanding the underwriting consequences associated with each pan design decision.

Keep It Simpe

Brokers aso can pay an important roe in assessing the quaity of an HSA programs administrative services.

A good program shoud offer empoyees:

–The abiity to open HSAs whie they are enroing for heath coverage.

–The option of making payments either through payro-deduction or direct-deposit arrangements.

–A Web site that can be used to manage both the HDHP and the HSA.

–Convenient toos for getting to HSA funds.

The best way to give empoyees access to HSA funds is to provide a system that processes caims at the “point of purchase,” as HSA hoders are paying for care at cinics or buying prescription drugs at drug stores.

Few heath pans now offer rea-time, point-of-service caim processing. The best common aternative is for heath pans to shift the cash account caim from their usua caims adjudication system to a specia cash account caims system for generation of payment.

Donad P. Sacco is the chief strategy officer for MyHeathBank Inc., Portand, Ore. He previousy was the president of Regence BueCross BueShied of Oregon, Portand. He can be reached at [email protected].

Reproduced from Nationa Underwriter Edition, January 6, 2005. Copyright 2005 by The Nationa Underwriter Company in the seria pubication. A rights reserved.Copyright in this artice as an independent work may be hed by the author.


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