Health savings accounts paired with high-deductible health plans continue to grow as an option for employers and employees seeking an economical, convenient coverage option. Now, the time has come for employers to move beyond the simple administration of these accounts to provide a more meaningful strategy so these options can most benefit their employees.
Though health savings account enrollment continues to grow, traditionally employers have had little insight to gauge the success of their program beyond viewing basic enrollment numbers. How employees are using their accounts can have a dramatic effect on an employer’s overall strategy and benefit plan.
Having recently passed the 10th anniversary of the enabling legislation for health savings accounts, the industry, employers and brokers-agents all have the opportunity to move the accounts forward with the use of insightful reporting and analytical tools.Reporting process
To fully realize the benefits of these accounts and influence employee behavior to improve health and ultimately lower care costs, employers need to have supporting data and applied analysis.
The employer needs to get the data in a usable format and then have the information analyzed for and applied to the employer’s specific situation. Then the employer needs to take action based on what the information is revealing.
These steps can appear straightforward, but the norm with data reporting has often been to review the data and file it away. Translating into action is unlikely when resources to implement change are limited, partnered with a lack of understanding or unfamiliarity with the data.
Good reporting can provide aggregated data for each employer group, month to month, which allows a better understanding of the habits of the account holders and any trends. By better understanding those trends, employers can react and influence employee health decisions, leading to better health and cost containment.
Reporting can provide a wealth of data, including:
Enrollment — with new account openings and closings.
Balances — total, average and broken into tiers.
Contributions — employee and employer.
Distributions – amount, frequency and method.
Investments – number of accounts and balances.
Analyzing the data can appear cumbersome, but it doesn’t have to be. We have found it helpful to look at each data point as if it were the answer to a question. Each of these questions can be answered through the data and can be tracked over time. It is important to analyze the reports with the employee in mind.
Some common questions:
How are employees using their accounts?
Are the employees using their account more often to spend or save?
How much does an employer have to fund, and for how long?
What is the level of employee engagement in the plan?
What are the employees’ habits for contributions and distributions?Looking deeper
We also have identified several markers that allow for tracking trends, including:
Percentage of accounts with employee contributions.
Contribution to distribution ratio.
Distribution frequency versus benchmark average.
Remaining balance to contributions.
Data reporting can also help identify and classify different behaviors of employee accountholders, which is helpful in creating tailored communications. For example, if employers identify that employees regularly spend their account balances and aren’t realizing the benefits of saving in the account, they can implement a tailored communication plan on the importance of building long-term wealth in their health savings account.
To effectively implement change based on the reporting data, employers need to identify what they hope to accomplish with their health savings account offering. Their action plan needs to include choosing the best way to affect behavior and get results, a way to measure those results for success, the resources needed to carry out the plan, regular review, and a way to adjust and improve the plan.Moving forward
Many employers are strapped for the time and resources to properly execute their plan, monitor results and make improvements. But business partners including health-savings administrators and brokers-agents have the experience and knowledge to help.
In the past decade, health savings accounts have proved to be an important long-term savings and cost containment vehicle for health care expenses. In the next decade, we need to focus our attention on the tools needed to create measurements of success and execute plans that can improve the future health and wealth of employees.