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Consumer-driven health care (CDH) accounts, such as health savings accounts (HSAs), health reimbursement arrangements (HRAs) and flexible spending accounts (FSAs), offer huge benefit to consumers, employers, and the U.S. health care system. But, despite being widely offered by employers, these accounts are too often under-utilized and under-funded.

According to Aite Group research, only 23 percent ($86.3 billion) of the $371 billion spent on out-of-pocket health care costs in 2018 are estimated to flow through tax-advantaged accounts. This means that a staggering $285 billion will be spent on out-of-pocket expenses using post-tax dollars, leaving billions in tax savings on the table. Broken down, a simple change in the way consumers pay for their eligible out-of-pocket medical expenses would save employers $22 billion in FICA taxes and consumers another $85 billion in state and federal taxes (assuming an average federal/state tax rate of 30 percent).

With open enrollment just around the corner, there are plenty of things that brokers and their clients can do to influence account adoption to help employers take home their share of a $22 billion tax savings opportunity. With CDH account penetration rates ranging from single digits to more than 75 percent, clearly, some employers have found ways to push uptake well beyond the national average.

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