The ACA has complicated yet also improved CDH over the past 11 years, he said. How have leading CDH products fared under the ACA?

"In 2010, 37% of workers who were offered flexible spending account enrolled in one, with an estimated 18 million FSA accounts and an average annual contribution of $1,400," Armstrong said. "By 2019, the total number of FSA accounts had risen to 30.2 million. By next year, the market is expected to grow to 33 million accounts."
"In 2010, the estimated number of health reimbursement accounts was 10 million," he said. "By 2019, that number had grown to 15 million. By next year, estimates put the number of HRAs at almost 16 million."
"Finally, we have the hugely successful story of health savings accounts," Armstrong said. "In 2010, just a quarter of those under age 65 who had private insurance were enrolled in a high-deductible health plan. In 2017, enrollment in HSAs had nearly quadrupled to 32% of commercially insured individuals. By 2019, total accounts had soared to 28.3 million. By the end of 2020, there were nearly 30 million HSA accounts, with an asset value of $800 billion, almost $24 billion of which was being invested. Projections are that HSAs will reach 43.7 million accounts next year."

Armstrong offered six takeaway messages for brokers and third-party benefit administrators:

FSA still are the most popular CDH account despite ACA regulatory changes. With the OTC restriction recently removed, look for increased interest in FSAs from employer groups.
Take advantage of the growth of HRAs, especially newer ones such as ICHRAs, before competitors grab all of that market.
HSAs are the only accounts that offer triple tax savings (tax-free contributions, tax-free withdrawals and tax-free interest/investment income) for participants They also help employers save money on premium costs by offering an HSA-eligible HDHP plan option.
HSA popularity is surging, and these accounts typically are much easier for TPAs to administer than FSAs or HRAs. If not already offering HSAs, this is a great time to start.
Couple FSA, HRA and HSA accounts with Lifestyle Spending Accounts and Student Loan Repayment Assistance to add even more value to your services menu. Keep client aware of regulatory complexity and the financial ramifications of going it alone.
TPAs can and do save employers more in compliance penalties than they cost. This is especially true given all the complexities introduced by the ACA.

"Partisan conflicts triggered by the ACA and numerous efforts to dial it down, if not eliminate it entirely, are taking their toll," Armstrong concluded. "However, the Biden administration has expressed full support for the ACA. Short of one or more U.S. Supreme Court rulings to repeal all or a major part of its provisions, the ACA is expected to remain in force and continue evolving for many years to come.

Instant Insights /

11 years of ACA: Consumer-directed health care accounts thrive

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