Profiles of HSA Users
Roy Ramthun
April 2014
Meet Roy
Mr. HSA
Topics: What will we cover?
1. Common myths about HDHPs & HSAs
2. Distinct profiles of HSA holders
3. How to use HSA profiles to your advantage
2014
2015
Breaking News!
HSA Contribution Limits
HDHP Minimum Deductible
$6,550 $6,650
$2,600
Family
$2,500
$1,300
Single
$1,250
$3,300 $3,350
HDHP Out-of-Pocket Max
$1,000 $1,000
$12,900
Family
$12,700
Single
Family
Catch-Up
NOTE: The IRS must publish the
official numbers by June 1.
$6,450
Single
$6,350
Common Myths
MYTH #1
“
HDHPs/HSAs are only
good for healthy people”
HSAs Are Good for Sick People, Too!
o
Preventive care is exempt from the deductible
• Disease management costs are not
o
Catastrophic limits provide real protection
• Limits apply to all covered benefits, including Rx
• Limits cannot exceed (for 2014):
• $6,350 for singles
• $12,700 for families
• ACA adopted these limits for all plans for 2014
HSA vs. ACA Limits: 2015
$6,450
Single
$6,600
$12,900
Family
$13,200
MYTH #2
“
HDHPs/HSAs are only
good for young people”
HDHP Enrollment Data
60+
10%
0-19
27%
50-59
21%
20-29
12%
40-49
18%
30-39
13%
Age distribution of people covered by HSA-qualified HDHPs, Individual Market, January 2013
MYTH #3
“
HDHPs/HSAs are only
good for wealthy
people”
HSA Tax Deduction Data
o
Average tax deduction/return = $3,051
• < $50,000 -- $2,075
• $50,000 - $100,000 -- $2,410
• > $100,000 -- $3,936
o
Percent of Returns, by income group
• < $50,000 – 23%
• $50,000 - $100,000 – 30%
• > $100,000 – 47%
Source = IRS Statistics of Income Bulletin (Winter 2014), data from 2012 tax returns
HSA Enrollment Data
o
15.5M Americans enrolled in HDHPs
o
10.7M HSA accounts
o
$19.3B in assets in HSA accounts (only $2.3B invested)
o
$2,356 = average funded HSA account balance as of 12/13
Source = Devenir, data as of 12/31/13
Participant Profiles
HSA Account Holders
Unengaged
Sitting Tight
Saver
Maximizer
Pass-Thru
Spender
Investor
Unengaged
Sitting Tight
Pass-Thru
Spender
Saver
Maximizer
Investor
One Administrator’s Profile
HSA Experience Matters
HSA Investments, Low but Growing
Employer Strategies
EMPLOYER STRATEGIES
To Help Sick & Low Paid Employees
o
HSA funding – amount & timing
o
HRA funding – post-deductible
o
Cafeteria plan benefits
• FSAs, wellness programs, disease management programs,
supplemental insurance
o
Support – education & communication
EMPLOYER STRATEGIES
Don’t Undersell the HDHP
o
Most employees assume HDHPs offer inferior coverage
• Premium savings
o
HSA funding can actually lead to a richer plan than
before (i.e., higher actuarial value)
• “Bronze” HDHP (AV = 62.0%)
 AV with $500 contribution = 68.0%
 AV with $1,000 contribution = 73.6%
 AV with $2,000 contribution = 82.4%
EMPLOYER STRATEGIES
To Help Young Employees
Communicate the power of compound interest
EMPLOYER STRATEGIES
Measure Engagement
What data can help measure “engagement?”
• How many employees never opened their HSA?
• How many employees are not contributing any personal
money to their HSA?
• How many employees are spending every dollar contributed
(i.e., minimal or zero balance)?
• Are average balances  or  ?
• Does changing the employer contribution amount or timing
affect employee behavior?
EMPLOYER STRATEGIES
Make Data Work for You
o
The more employers know about their employees,
the more they can:
• Improve employee well-being
• Reduce costs
• Generate positive experience
o
Meaningful, usable data can help employers:
• Understand employee “engagement”
• Drive or align plan strategies
o
If your HSA administrator cannot provide good
data, it might be time to switch
EMPLOYER STRATEGIES
Leverage Personalization
Employee Strategies
EMPLOYEE STRATEGIES
How to Fund the HSA
o
Many people can contribute more than their out-of-pocket risk
o
Take advantage of employer matching contributions, if offered
o
Pay attention to employer incentives that may increase
contributions
o
Don’t forget to factor in tax savings
• Making contributions via payroll deduction is best
o
If uncertain how much to contribute, use the “look back”
method
o
Ask questions – NEVER assume!
Questions?
Thank You!