According to the 2010 Health Market Study conducted by Agent Media in partnership with the National Association of Health Underwriters, a large number of agents are challenged by their prospects’ preference for traditional health insurance. That’s not surprising, given that so-called “traditional” health insurance has been with us in some form or other since the late 1800s, while HSAs were introduced less than a decade ago.
The bias may also be due to the fact that traditional health insurance seems less complicated than HSAs, and people like simplicity. Whether they are participating in employer-provided plans or purchasing their own coverage, they are used to simply paying their premiums and going about their business. If they want to pay less for health care out of pocket, they pay bigger premiums. If they prefer lower premiums, they accept higher deductibles and pay more out of pocket, hoping they’ll stay well enough to keep these costs to a minimum.
Nonetheless, the preference for traditional health insurance may not hold much water once your prospects have all the facts. Individuals or families funding their own health coverage could be good prospects for HSAs, but you can also tap business owners contemplating the plans as an additional option for employees or a replacement for current coverage. When dealing with the workplace, it’s important that you not only explain HSAs to your prospects — the employers — but also to the employees. After all, if employees don’t see the value of participating in the plan, the option will have less value to their employer.
So, what’s all the good news?
HSAs are remarkably flexible and designed to accommodate many situations — and the choices are even broader when you’re looking at employer-provided HSAs. This versatility, however, can make them seem more complicated at the outset. The primary difference between traditional plans and HSAs is that HSAs were specifically designed to give people more control over their health care and other personal expenses. The core advantages of HSAs are their favorable tax benefits, as well as the opportunity to put funds away for both short-term medical costs and long-term financial needs.