HSAs can be fixed through bipartisan support — millions depend on it
Read the op-ed on The Hill here.
There are about 178 million Americans who get their health insurance through an employer-sponsored plan. On average, employers pay about 80 percent of the costs for individual beneficiaries, and 70 percent for family coverage.
As you can imagine, that’s a huge amount of money changing hands — and employers have a massive incentive to do whatever it takes to force value into the health care system.
Accordingly, employers are constantly innovating when it comes to employee benefits. From new service settings to preventative care redesign, employers have given their employees access to benefits that would have been hard to conceive of 20 years ago.
As Congress considers their health care agenda for 2018, we are hopeful that making some modest, but important policy changes to Health Savings Accounts (HSAs), a growing benefit offering, will be high on the list.
HSAs may not be the right option for everyone. But the reality is, HSAs and other consumer-directed accounts are taking the market by storm, as more and more employers either create an HSA plan option, or completely replace their existing plans with consumer-directed plans paired with an HSA.
More than 20 million Americans are covered by HSAs, with 2016 HSA enrollment more than doubled in the past five years. Increased consumer demand for HSA offerings, and the massive uptick in enrollment, is likely to continue.
As such, statutory reforms are needed to allow these benefits to adapt to evolving employer offerings — we should act now to make these accounts as good as they can be for those who are enrolled, whether HSAs are our favorite plan design option or not.
Since HSAs were established by the Medicare Modernization Act in 2003, employers have innovated health benefits that are offered outside of major medical insurance policies, ranging from wellness incentives, to onsite or retail clinics, to telemedicine.
The way that the HSA statute is written is causing confusion as to whether these benefits can be offered to employees at a discount before they pay their whole deductible. There is bipartisan language to fix it.
Another unintended consequence of HSA rules that can be fixed through existing bipartisan language is the misaligned incentives related to complex chronic disease and wellness.
Employers want to encourage their employees with chronic diseases to manage their conditions and increase wellness. They employ value-based insurance design strategies to ensure that employees with chronic diseases do not face undue burden in managing their conditions.
For example, minimal or no co-pays for insulin or other important diabetic services that can keep diabetes patients out of the hospital. These arrangements are not permissible under existing rules. Neither is the use of HSA dollars for wellness activities like a gym membership or exercise classes and equipment.
We want our employees to engage in activities that make and keep them healthy, and we should encourage this by allowing HSA dollars to pay for it.
Finally, there are a host of other bipartisan technical fixes that can encourage primary care, streamline rules for rollovers and conversions from other types of consumer-directed health accounts into HSAs, and update the definition of dependents to make sure beneficiaries can take advantage of the family’s HSA.
These improvements are bipartisan, and they’re not an attempt to dodge taxes — they simply will improve employers’ abilities to enhance benefits, while making life a little better for individuals and families who are in HSA plans.
Both chambers must act and enact these changes, helping the millions of Americans who have HSAs today, and the many more who will sign up in the coming years. The next opportunity to make these changes will be on the omnibus spending bill expected next month, or on legislation that will extend certain expiring Medicare programs. Congress should seize the opportunity, and get a win for the 20 million Americans with HSAs.
James Gelfand is the senior vice president for health policy at The ERISA Industry Committee (ERIC). ERIC is a national association that advocates exclusively for large employers on health, retirement, and compensation public policies at the state, federal, and local levels.