When given the choice between a high-cost, no-deductible health care plan and a cheaper one with a high deductible, 60% of employees choose the cheaper plan, according to a recent study. As part of the cheaper plan, employees are offered an HSA to which the employer contributes. For example, a higher-cost plan where the employer paid $600 a month was shifted to a lower-cost plan at $400, with the extra $200 going into either an HSA or toward voluntary benefits; 50% choose the HSA.
HSAs have tripled over the last six years, growing from 4.5 million in 2007 to 15.5 million in 2013. Some liken the new low-cost/high-deductible plans coupled with an HSA to DC plans, where people have greater choice over their options. Indeed, according to a study by Wells Fargo, people with HSAs have 58% higher account balances in their DC plans.
Will employers starting looking at benefits dollars, including the match money for retirement plans, as a single pool — giving employees the option to use the money as it best suits them, depending on their age, health, finances or even a spouse’s coverage at another employer? Maybe the “total compensation” dog, which has been lying around for years, will soon have its day.
