Consumer-Driven Health Care Trends - Making HSAs and FSAs Work for Employees
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Check out the presentation covered during our webinar, Emerging Trends in Consumer-Driven Health Care, by CDH industry experts Barbara Boudreau, Vice President of Strategic Initiatives at ConnectYourCare, and Eric Remjeske. The slides cover some of the key findings from the ConnectYourCare CDHP Trends survey and the recently released Devenir HSA report. Some of the things you'll learn about include: • Recent and historic growth in HSA assets and enrollment • Investment trends among HSA participants • What drives employees to enroll in HSAs and FSAs • Suggestions for employers looking to grow employee participation in tax-advantaged accounts If you enjoy the slides, let us know in the comments. You may also want to check out the on-demand webinar to hear the insights Barbara and Eric discussed together. Watch it now at https://www.connectyourcare.com/trends-webinar.
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Consumer-Driven Health Care Trends - Making HSAs and FSAs Work for Employees
- 1. #cycwebinar A SlideShare Presentation from: © 2017 ConnectYourCare. All Rights Reserved. Industry Outlook: Emerging Trends in Consumer-Driven Health Care
- 2. 2 #cycwebinar Presentation Created by: Eric Remjeske President / Co-Founder Devenir Group, LLC Barbara Boudreau VP of Strategic Initiatives ConnectYourCare © 2017 ConnectYourCare. All Rights Reserved.
- 3. 3 #cycwebinar What We’ll Cover • CDH: Through the Years • Assets: Deposits and Investments • Research Results and Market Trends • Best Practices and Full Replacement Strategies © 2017 ConnectYourCare. All Rights Reserved.
- 4. 4 #cycwebinar Defined Benefit to Defined Contribution Trend • Health care’s consumerism movement actually mirrors the history of retirement benefits – and the shift from pensions to 401Ks 4 0% 10% 20% 30% 40% 50% 60% 70% 80% 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Distribution of private-sector active participants in employment-based retirement plans, by type Defined benefit only Defined contribution only Both Source: U.S. Department of Labor Form 5500 Summaries 1979-1998. Pension Benefit Guaranty Corporation. Current Population Survey 1999-2011. EBRI estimates 1999-2010. © 2017 ConnectYourCare. All Rights Reserved.
- 5. 5 #cycwebinar HSA-Eligible Plans Gaining Critical Mass 3 HSA-eligible plans gaining critical mass Distribution of health plan enrollment, by plan type 14% 13% 14% 16% 17% 19% 20% 20% 21% 20% 52% 58% 57% 56% 55% 58% 60% 58% 57% 60% 10% 8% 9% 9% 10% 8% 10% 12% 13% 13% 24% 20% 20% 19% 17% 13% 8% 8% 5% 4% 0% 20% 40% 60% 80% 100% 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Conventional HMO PPO POS HDHP/SO Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits 1999-2015; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988. © 2017 ConnectYourCare. All Rights Reserved.
- 6. 6 #cycwebinar Triple Tax Benefit Not Taxed TaxedTraditional IRA Money In Money Out Taxed Not TaxedRoth IRA Not Taxed Taxed401(k) Not Taxed Not Taxed* Health Savings Account (HSA) *If used for qualified medical expenses Retirement Health/ Retirement Source: Internal Revenue Codes Publication 590, Section 223 Better Tax Advantages than other Accounts 6 © 2017 ConnectYourCare. All Rights Reserved.
- 7. 7 #cycwebinar HSAs: A Growing Marketplace • HSA accounts now exceed 20 million, holding almost $37 billion in assets • HSA investments up 29% year over year • Health plan partnerships accounted for 37% of new accounts • Growth potential – 24% unfunded accounts © 2017 ConnectYourCare. All Rights Reserved. Source: Devenir Research 2016 Year-End HSA Market Statistics & Trends
- 8. 8 #cycwebinar Industry Contributions and Withdrawals 2016 Employer Contributions 26% of all HSA dollars contributed to an account came from an employer. The average employer contribution was $868 (for those making contributions) © 2017 ConnectYourCare. All Rights Reserved. 2016 Employee Contributions 46% of all HSA dollars contributed to an account came from an employee. The average employee contribution was $1,786 (for those making contributions) 2016 Individual Contributions 19% of all HSA dollars contributed to an account came from an individual account not associated with an employer. The average individual contribution was $1,713 (for those making contributions) Source: Devenir Research 2016 Year-End HSA Market Statistics & Trends
- 9. 9 #cycwebinar Total Account Growth © 2017 ConnectYourCare. All Rights Reserved. Source: Devenir Research 2016 Year-End HSA Market Statistics & Trends
- 10. 10 #cycwebinar 1 0 Concept ACA Post ACA Cadillac Tax Deliver in 2020 Source: Devenir Research 2016 Year-End HSA Market Statistics & Trends © 2017 ConnectYourCare. All Rights Reserved.
- 11. 11 #cycwebinar © 2017 ConnectYourCare. All Rights Reserved. 15% of HSA Assets Held in Investments Source: Devenir Research 2016 Year-End HSA Market Statistics & Trends
- 12. 12 #cycwebinar An Inside Look: HSA Investments © 2017 ConnectYourCare. All Rights Reserved.
- 13. 13 #cycwebinar CYC Trend Report: Key Findings © 2017 ConnectYourCare. All Rights Reserved. Said primary reason for enrolling in HSA was as a savings vehicle for future health care needs 40% Reported health care/medical expenses as primary concern when it comes to retirement, over lifestyle expenses 63% Said “reviewing my previous spending habits” most useful activity deciding how much to contribute 59%
- 14. 14 #cycwebinar The Tools that Drive Enrollment © 2017 ConnectYourCare. All Rights Reserved.
- 15. 15 #cycwebinar HSA: A Demand for Accelerated Funding © 2017 ConnectYourCare. All Rights Reserved. Almost 70% of participants indicated that accelerated access to HSA contributions had either a strong impact or some impact on their decision to enroll in an HDHP 70%
- 16. 16 #cycwebinar FSA: What Participants Want Most Nearly 50% want a decrease in the need to submit documentation for eligible expenses © 2017 ConnectYourCare. All Rights Reserved. Nearly 30% want an increase in eligible expenses allowed
- 17. 17 #cycwebinar Employer Mindset: What’s Most Important in a CDH Partner © 2017 ConnectYourCare. All Rights Reserved. Overall employee experience Employer support/account management Price/cost of product Implementation timeline and processes Tools and technology Overall reputation Consumerism advice to employees Flexibility in plan design solutions Independence as an administrator 81% 76% 66% 56% 55% 52% 50% 47% 44%
- 18. © 2017 ConnectYourCare. All Rights Reserved. Thanks! We hope you enjoyed this presentation
- 19. 19 #cycwebinar Related Resources You’ll Love • On-Demand Webinar: connectyourcare.com/cdh-trends-webinar • Connect With CYC – Email: webinars@connectyourcare.com – Updates: connectyourcare.com/signup – Blog: connectyourcare.com/blog • Download the CYC Trends Report – connectyourcare.com/decisions • Connect with Devenir – Email: hsa@devenir.com – Newsletter: http://bit.ly/2nnurkc • Download the Devenir HSA Research Report – devenir.com/research © 2017 ConnectYourCare. All Rights Reserved.
Editor's Notes
- Moderator
- Moderator
- Barb
- Eric - Parallels 401k workd
- Eric
- Eric
- Eric 20 million accounts represent at 20% growth over previous year; $37 billion grew 22% over previous year.
- Eric
- Eric
- Note: Moderator to present poll after this slide. Eric HSAs –persevere through events over time
- Eric – present data Barb- I really like because it shows that people are thinking about and using for long term ---- 3-4% of investors, small group but represent a large amount of assets.
- Barb: So, what’s the right mix of investment options? CYC has: Subset of 25, ties to Dev’s average offering of 23 100+ no-load mutual funds across a wide range of fund families and asset classes No trading or transaction fees, with unlimited trading Can customize to align with retirement plan investments – Eric 401k Integrated investment center Devenir research: Average mutual funds offered: 23 Average Morningstar rating: 3.7 Average expense ratio: 0.75% Average number of funds held: 4.4 **************** May choose to also discuss: Some clients are really hitting the investment message out of the park – one of our clients, for example, has an AVERAGE investment balance of 12k - Allina Health Large not-for-profit health care system based in Minneapolis – great reputation for excellent patient care 24k benefit eligible, very diverse, union & non-union employees Corporate philosophy of “protecting people's #1 asset -- their good health” carried into benefits 41% of employees have a tax-advantaged account 13 hospitals, 15 pharmacies, and 100 clinics and specialty centers across Minnesota and Wisconsin; Very diverse population, more women than men, Lots of women of child bearing age – recognize importance of account. Great reputation, known for excellent patient treatment FSA Dep Care$4,527,705.00 / 1125 FSA Medical$8,744,779.50 / 8395 HSA$15,199,451.38 / 5065 Average Age of CYC Accountholder Allina Health 42.9 Average Investment Balance Allina Health $12,427.43 Number of Employees Investing Allina Health 127 / out of 5,065
- Note: Moderator to introduce poll after this slide is presented. **************** Barb Introduce research report: CYC CDH Enrollment and Usage Trends Based on aggregate survey results (2016-2017) 14,641 employees currently enrolled/eligible to enroll in HSAs and other tax-advantaged accounts 249 company stakeholders that purchase, implement, and/or administer employee benefits Findings: 40% -> HSA accountholders starting to “get it.” They see HSA as long term savings vehicle over more immediate, shorter term benefits like tax savings and lower premiums. 63% - Participants further showed they are looking toward the future – when asked their primary retirement concern – health care vs lifestyle – 63% chose health care expenses. Market potential for add’l retiree accounts. 59% -> Participants want to see how these accounts impact THEIR bottom line. Integrating with your health plan to show specific savings can be very valuable in determining contributions. What’s not effective? Seeking advice from family/friends was the lowest rated option.
- Barb – Let’s look at how employees learn. When asked about why they selected a tax-advantaged account: 39% said previous experience with the account. So inertia and comfort level, whether good or bad, may have more impact than most employers would have thought. The second most valuable tools were communications – so all that time you benefits teams are spending is not going to waste. Following that, employees like savings calculators , and advice from friends, family members or financial advisors. Plug our plan design calculator. - 3% enrollment fairs – as much time and effort as go into these – it may be surprising for you to hear that employees do not make decisions at these events.
- HDHP has risk. But if they has access to accelerated funding. Has significant impact on decision to enroll. The fact that 70 percent of surveyed employees indicated that their decision to enroll in an HDHP offering an HSA was driven by access to accelerated contributions…clearly tells us that there is an overarching concern for having funds available at the start of a plan year--when balances can be zero or low--to help offset the high deductible. HOD plug …barriers to enrollment…
- Barb Switching gears, let’s take a look at Flexible Spending Accounts. When surveyed, - no surprise - thirty percent said that if they could change one thing about their FSA, it would be expanding the eligible expenses covered. However, their biggest and by far most popular complaint was reducing the need to submit receipts. ClaimsAlly plug.
- Let’s look at the employer perspective. Employers selecting vendors for these plans are mostly concerned with the participant experience, not surprisingly. What is surprising, however, is that they indicated pricing is secondary to the employee experience.
- Moderator What trends do you see going forward in market over the next 3-5 years? Best practices in user experience to drive investments. Research – app usage y o y growth.
- Moderator