The HSA engagement alphabet

Though consumers have been empowered with greater financial control through the consumer-directed health care movement, many have not fully taken charge of their health care savings and payment options.

As the financial onus shifts, consumers increasingly expect that their health plan providers and employers will ease the transition by providing in-depth health care education, tools and resources. Yet health care savings accounts (HSAs) continue to represent an area of major disconnect between plan providers, employers and consumers.

What has changed?

There is an acceleration toward consumer-directed plans and a push into private exchanges. This is driving increased adoption of high-deductible plans and HSAs. According to the latest HSA census report from America’s Health Insurance Plans (AHIP), almost 17.4 million Americans are enrolled in HSA-eligible health plans. In fact, Towers Watson’s 2015 Emerging Trends in Health Care Survey found that almost half (49 percent) of employers will offer or consider offering an account-based health plan as their only health plan by 2018. At the individual level, consumers are starting to understand that these plans are actually low-premium plans and a good way to cap their own out-of-pocket financial risk.

While HSAs have been around for more than a decade and adoption is on the rise, many consumers remain uncertain about when and how to use them. Consumers need more education – arguably in the form of continuous engagement – to properly manage health care spending while benefiting from tax advantages and planning for retirement health care needs.

Based on basic HSA calculators, saving $1,000 per year for 20 years in an HSA and using other funds for any short-term health needs could give consumers more than $8,000 in tax savings and a healthy $26,870 to cover future retirement medical costs. The health care industry as a whole must step up to educate consumers about new health care account options with a special focus on HSAs.

How can you improve the proper use of HSA funds through effective engagement? It’s as simple as A, B, C  –  and D.

A. Avoid the enrollment education trap.

Open enrollment happens every fall, but is by no means the only time that education is needed. Better decision support tools are starting to help consumers think through the best plan option for their own needs during the enrollment process – and more consumers are opting into HSA-style plans when they can see that full picture.

It is a given that employers and benefits consultants need to focus on helping consumers make smarter plan decisions during the enrollment period, but true engagement extends far beyond plan selection.

B. Bring in best practices from other industries.

The consumer spending experience needs to follow a natural flow, so the health care industry needs to draw from what has worked in retail and financial environments. There is a viable opportunity to use advanced analytics and consumer behavior trends to help drive smarter consumer behavior – even in the health care industry.