Region Matters When It Comes to HSA Funding, CDHP Adoption
By Bill Olson, Chief Marketing Officer at UBA
We’ve already discussed Health Savings Account (HSA) activity at length, looking first at the correlation between generous HSA contributions and increased enrollment in consumer-driven health plans (CDHPs). Second, we looked at how HSAs have performed in recent years across different industries. Now, we’ll look closer at HSA activity across different regions of the country, based on the results of the 2014 UBA Health Plan Survey.
New England, which typically has the most generous health care packages overall, sees only average HSA contributions of $685 for singles and $1,342 for families. California, on the other hand, has the most generous HSA contributions for singles at $808, yet the lowest enrollment in CDHPs: only 11.3 percent of plans in California were CDHP plans and only 8.1 percent of employees were enrolled in them.
“Market dominance of Kaiser and a strong HMO preference in California offsets the rate relief offered by CDHPs, making the high deductible not worthwhile,” says Brian M. Goff, President & CEO of Insurance Solutions, a UBA Partner Firm.
Moving to the middle of the country, we find the lowest HSA employer contributions in the South Central region: $360 for singles and $554 for families. North Central states, which have the highest offering of CDHP plans in the country at 36 percent with more than 40 percent of employees enrolled in such plans, also saw average HSA contributions, although still more than South Central.
“Since the North Central region is largely comprised of Anthem BCBS states, carrier motivations play into these stats,” says Mark Sherman, Principal of LHD Benefit Advisors, another UBA Partner Firm. “Specifically, low regional interest in HMOs and Anthem BCBS' purchase of Lumenos, a CDHP marketing specialist, made it easy for employers to move from a PPO to a CDHP.”
“In the Midwest, we still see some employers continuing to offer higher HSA contributions or lower premium contributions as a way to entice employees to these cost-saving plans,” says Andrea Kinkade, President/Benefit Advisor at UBA Partner Firm Kaminsky & Associates, Inc. “At the end of the day, employers typically have a budget that they work within,” says Kincade. “Either employee payroll deductions (premiums) increase or employer HSA contributions decrease to keep benefit costs within the budget.”
For the latest health plan cost trends, download the UBA Health Plan Survey Executive Summary. To benchmark your plan to others in your region, industry or size bracket, contact a UBA Partner near you to run a custom benchmarking report.