Health Savings Accounts haven’t had the impact many had hoped for. Some of the failures have to do with how companies tried to implement the programs.
Most of the mistakes companies made were wrapped in good intentions. Here are two of the typical – and worst – ones:
Offering dual plans to ease employees into an HSA. Some companies have tried the dual-plan approach – offering employees a choice between a low-deductible plan with no HSA or a high-deductible plan with an HSA. But a dual plan is usually a bad idea.
The logic behind a dual plan is that employees won’t feel trapped into signing up for an HSA.
The problem: Employees who have chronic health problems will avoid HSAs and sign up for the
low-deductible plan. Healthier people will join the HSA. So your organization will still get socked with high expenses and high premiums.
Instead of a dual plan, consider going totally HSA and offering wellness programs that meet the needs of your employees. Most high-deductible HSAs will cover the costs of the wellness programs – such as weight-loss plans, smoking cessation and physicals. That is, they’re paid for and not part of the deductible.
So a full HSA with wellness is probably the way to go.
Not offering some type of separate insurance for specific types of ailments. Separate, specific insurance could work as a way to gain buy-in.
The regs on HSAs say it’s OK to offer “permitted insurance” outside the high-deductible plan as long as the insurance is designed to cover expenses associated mainly with:
- long-term care, or
- cancer treatment.
Many companies are finding that employees are a lot more receptive to HSAs when they know they can get extra, nondeductible insurance for those specific areas. Also, IRS has OK’d first-dollar coverage and low deductibles for some preventive drugs, such as those that lower cholesterol.