A study of some 10,000 employer sponsored plans by UnitedBenefit Advisors of health plans revealed that about 24 percent ofall health plans offered either an HSA or HRA component — a 29 percentdecrease in the number of health plans nationally. That dropindicates that plan designers and health plan sponsors are stillout of sync on the value of these accounts.

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“Faulty plan design, in some instances, has led to smallerpricing gaps between traditional plans and HSA compatible plans,” says SteveSalinas, benefits advisor at Bridgeport Benefits, aCalifornia-based UBA Partner Firm. “Many insurers have addedstipulations to their contracts disallowing employer-fundedaccounts in the presence of a high deductible plan.”

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UBA’s data supports the overview that “enrollment andcontributions to these account-based plans varied wildly based onemployer size, industry, and region.”

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It offered a large employer/small employer illustration of thisnear-chaotic situation. “While large employers typically offer thelowest contributions to account-based plans, companies with 200 to1,000+ employees saw the most dramatic increases in enrollment,ranging from 50 to 90 percent over the last three years.”

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In some respects, plan designers and consumers in California maybe closer to figuring out how to design plans with HRAs and HSAs that strike a balancebetween the objectives of all three parties. California offers thebest HRA and HSA plans for singles and families.

  • California leads the country with the highest HRA contributionsfor singles, which average $2,288;

  • California is the only region in the country that increasedcontributions over the last three years, making them the mostgenerous in the nation by contributing $981 to singles and $1,789to families;

  • Families in California receive the second highest average familycontribution to HRAs at $3,950, a 13 percent decrease from threeyears ago when they led the nation at $4,537;

  • The average employer contribution to an HSA was $491 for asingle employee and $882 for a family.

“In California, health insurance costs are so high thatemployees very often gravitate to the lowest cost options,typically the HSA-compatible high deductible plans,” says KeithMcNeil, benefits advisor at Arrow Benefits Group in California, aUBA Partner Firm. “HRAs have been under health plan scrutiny due tothe trend of self-insuring the high deductible through an HRA,which the health plan believes raises the cost of their plans. Theyhave threatened penalties for non-compliance. So in the small groupmarket, it has been much easier to simply offer HSA compatibleplans and include the HSA as an option to members.”

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“Large employers (1,000+ employees) have not typicallyoffered competitive HRA or HSA plans because they are able to offerother types of more generous plans,” says Les McPhearson, CEO ofUBA. “But this is the sector to watch: If they see the kind ofdouble-digit cost increases other employer groups already have,they may have no choice but to offer more attractive HRA and HSAplans in an effort to control costs.”

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.