Agents and third-party administrators are seeing increasing receptivity to high deductible health plans (HDHPs) but not always seeing adoption of the ideal partner for an HDHP -- the health savings account (HSA). If you think that doesn't matter once an employer has bought into an HDHP program, you should reconsider.
An analysis of the number of qualified HDHPs and HSAs by Atlantic Information Services shows that only 30 to 40 percent of employees or individuals who have an HDHP ever open an HSA. That means that a healthy employee pays a premium each month and receives no benefits in the form of tax-sheltered savings to help them cover their current and future medical expenses. The willingness to stick with an HDHP by those employees who do participate in an HSA tells a compelling story.
Separate studies from Information Strategies Inc. and United Health Care reveal that those participants whose HDHPs are complemented by an HSA are more likely to play an active role in their health and wellness and are happier with their HDHP benefits. HDHP participants are far less likely to abandon their plan if they also establish an HSA, and they feel better about taking control of their health care. But how do you get them to open an HSA?
The key is something you're likely already skilled at -- communication. While the motivation for HSA and HDHP participation varies based on a number of factors, a careful telling of the HSA story will almost certainly bring in more HSA converts. In all communication, remember that you're talking about health care and taxes -- two subjects we would all rather avoid.
Just as important, there is much end-user resistance to things you might not have considered. For instance, privacy concerns make some employees uncomfortable with HSAs when the custodian is the same bank where their employer does business. Another thing to consider is the word "savings." Too many employees hear this word and don't realize the overall benefit, regardless of their ability to save. Rather, they need to understand what they can save in real tax dollars by just running their expenses through an HSA.
Once you have evaluated and selected the right custodian, your job may then entail selling an employer on when to begin employee communication and the importance of employer financial participation. Long before HDHP and HSA benefits are available, you need to begin discussing them. The most successful employer campaigns begin talking about the HSA a full six months before employees are eligible using printed flyers and newsletters, email campaigns, interactive Web sites, and employee meetings.
A sample employee presentation often includes a chart like this one:
Tax-sheltered savings benefits of HSAs will convince many employees. Others tend to come on board once they understand that the allowable expenses under HSAs are a much wider category than those covered by traditional health insurance. When an employee who has just had the flu sees that over-the-counter symptom remedies are allowable expenses, or an infant's mother learns that the special diaper rash cream she purchased at $30 per jar is an allowable expense, or they discover that HSA funds can even be used to purchase long term care insurance, enthusiasm grows.
If your client wants to turn an HSA idea into a sure-fire winner, a little bit of their own money deposited into each employee's HSA goes a long way. Experience has revealed that a token deposit into each employee's HSA account, as little as $5 per pay period, has been shown to significantly increase employee HSA participation.
Using this tactic, combined with a comprehensive communications program, the number of participating employees can rise from 30 to 40 percent to more than 80 percent of HDHP participants.
According to research from the Small Business Association, every year there are a growing number of employers who no longer offer health care insurance. Why not offer them a solution that will satisfy the needs of both the company and its employees? Together, the HDHP and HSA are a winning combination that will assure you'll be welcomed back time and time again.
Jill E. Kelly is responsible for overseeing health care initiatives and development of all health care products offered by The Bancorp Bank. She can be reached at 800-555-9316. 
