Many brokers today remain skeptical that consumer-directed health plans will fulfill their promise. But they are missing the point: the connection between health and financial security is clear to employers and, increasingly, to their employees.

Employers without question believe in these plans, judging by their rapid growth. Indeed, 61 percent of employers currently offer a consumer-directed plan, and an additional 17 percent plan to offer one next year.[1]

High-deductible health plans, paired with health savings accounts (HSAs), in particular, are gaining in popularity. According to a just-released study by America’s Health Insurance Plans, more than 11.4 million Americans are covered by HSA-eligible plans. That’s an increase of 14 percent over last year. Indeed, enrollment has nearly doubled in the past three years. HSA-eligible plans have grown because they ease employers’ cost burden, offer tax advantages for both employers and employees, and promote preventive care.

Saving money

Consumer-directed health plans are generating savings for employers. Companies with at least half of workers enrolled in such a plan report average annual costs per employee of nearly $600 less than firms without such plans. In fact, employers adding 10 percent or more employees to their consumer-directed plans between 2009 and 2010 actually had no increase in costs.[2]

As for employees, research shows that the annual premium costs for families decrease by an average of $2,350 for an HSA-eligible plan compared with a PPO plan, and that the premium savings cover nearly 60 percent of the average HSA-eligible plan’s deductible.[3] Of course, the accumulation of funds in their accounts also helps employees offset the higher deductible.

Improving health

HSAs are also linked closely to preventive care. Consumers are encouraged to get the care they need - most high-deductible health plans cover services such as immunizations, screenings, annual physical examinations and well-baby visits without having to meet the deductible.Determining whether enrollees in one type of health plan are healthier than those in other plans is difficult since there are so many variables to consider. However, there is a connection between corporate wellness program effectiveness and consumer-directed plans. For example, 11 percent of enrollees in consumer-directed plans are more likely to participate in an exercise program than enrollees in other plans; 43 percent received a health screening compared with 30 percent in other plans.[4]

Some employers are underscoring their commitment to employee health by requiring workers to participate in wellness programs in order to receive employer-paid HSA contributions. An employer in the southeast, for example, contributes $750 to an employee’s HSA ($1,250 for those with family coverage) if the employee completes a biometric screening and online health assessment. Employees that don‘t fulfill these requirements receive no contribution.

Another employer, an insurance company, matches 10 percent of employee contributions to HSAs, but only after employees undergo a baseline biometric screening that includes blood pressure, blood glucose, LDL cholesterol and body mass index.

The bandits in classic Western films used to hold up the stagecoach with the warning, “Your money or your life.” It doesn’t have to be a choice. Brokers who help clients develop benefits programs that connect health with financial well-being will have a clear advantage over their competitors.

Health savings accounts (HSAs) are individual accounts offered by OptumHealth Bank^SM, Member FDIC, and are subject to eligibility and restrictions, including but not limited to restrictions on distributions for qualified medical expenses set forth in section 213(d) of the Internal Revenue Code. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment, and restrictions. Federal and state laws and regulations are subject to change.

Instant Insights /

Cost savings, improved wellness make the case for HSAs

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