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The gap in premiums between HSAs and older benefit designs is huge, finds the new Kaiser Family Foundation employer survey released this week. HSAs have 18% lower premiums. HRAs are at least 3% lower-priced for the average employer-paid family premium across the U.S.
The average 2011 HRA family premium is reported as $14,909 a year in the U.S. and the average HSA premium is $12,655, compared with $15,363 for non-CDH plans. All three are paid for with different out-of-pocket cost combinations: HSAs have the highest OOP cost but are the fastest-growing, HMOs have the lowest OOP cost but are the least-popular option.
These premium differences are clearly driving adoption. Even using the KFF definition, CDHPs are offered to almost 25% of all workers nationwide, and the latest survey finds that 17% of all employees are now in an HSA or HRA. The most telling stat: 84% of all employers now offer only one type of plan. That bodes well for total replacement HSA or HRAs going forward.
Offer Rates Rising CDHPs are moving up fast on offer rate: 23% across all firms. HMOs are offered at 16% of firms, and “POS” is at 24%. Pure PPOs without any account are still strong, but just fell to a 50% offer rate across all firms. CDHPs have the second-highest offer rate (behind PPOs) in firms with over 200 workers, and in firms with 200-999 workers.
Some 23% of U.S. employers in 2011 offer an HRA or HSA as defined by KFF, a big increase over last year. Large firms with over 1000 workers are the biggest backers of CDHPs: 41% told KFF they offer a CDHP compared with 23% of small firms and 26% of mid-sized firms. KFF says that total enrollment of employees in CDHPs has risen to 17% of the U.S. workforce.
Having said all this, we do not consider the KFF definition of HRAs to be solid. It only counts HRAs with a $1000 individual deductible ($2000 family), and it excludes all HRAs set up by an insurer (which employers often don’t track) even if the employer funds the account. Basically, mostly TPA-run HRAs are counted, a big percentage but in no way an accurate total.
But for HSAs the definition is too liberal. KFF counts any HSA account that is owned by the employee (i.e. reported by the employer), even if it is never funded. Bottom line: HSAs are over-reported and HRAs are under-reported. But the underlying total growth trend is probably just about right.
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