Health Savings Account Blog

"This wasn't a one-year decision," says John Wagner, a Blue Cross Blue Shield product manager. "We started this transition four years ago as part of an over-arching [human resources] strategy... to have an engaged, productive workforce."

The Jacksonville-based insurer's leaders have become firmly convinced that an HSA plan makes sense because it requires workers to make their healthcare decisions -- and rewards those with healthy behaviors.

By law, Health Savings Accounts combine high-deductible health insurance plans with a tax-free savings account to which both employers and employees can contribute, similar to 401(k)s for retirement accounts. Unlike more common flex plans, Health Savings Account money can roll over year after year if not used.

Wagner says employees have two Health Savings Account possibilities: A $1,500 deductible with employees paying 10 percent co-insurance and a $2,500 deductible with a 20 percent co-insurance.

Critics of Health Savings Accounts say that their problem is that they assume consumers can make intelligent decisions about their healthcare when it's often difficult for most people to judge the costs and benefits of complex medical alternatives.

"They work well, especially for the healthy and wealthy," says Santiago Leon, a Miami healthcare insurance broker. "They work less well for the less healthy and less wealthy."

Health Savings Accounts also force people to make healthcare decisions when they don't have information. Leon points out that if a person is feeling symptoms that might be swine flu, he might delay treatment because he doesn't want to pay against his deductible or use his Health Savings Account dollars.

Wagner says such criticisms are unfair since Health Savings Accounts are built on a philosophy of informed decisions and wellness.

At Blue Cross, a key is for employees to fill out a risk-assessment survey, in which health basics like weight, blood pressure and cholesterol level are combined with behavior patterns like smoking and stress levels. Such surveys, becoming more popular among all employers, can lead to advice about diet and exercise, in an attempt to improve wellness and lower costs. Stressed employees might be advised to seek out the employee assistance program.

If employees fill out a risk assessment, Blue Cross will contribute $1,000 to the Health Savings Account. If they don't, the company match is $500. Employees can contribute their own money, in amounts depending on income based on guidelines from the Internal Revenue Service, Wagner said.

As its salespeople tell prospective customers, Health Savings Accounts are designed to make users smart consumers, since a percentage of their own money pays for almost all treatments.

The exception is some basic screenings -- such as mammograms and colonoscopies -- which the insurance pays for completely. Some other preventive measures, such as annual physical, involve co-insurance but not the deductible, says Wagner. That means if a person with the $1,500 deductible and 10 percent co-insurance had a $150 physical on Jan. 2, she would pay $15.

Wagner said there has been very little push-back from employees.

"Probably only three or four employees have raised concerns," he said.

Contrasting the Blue Cross HSA plan for employees with the offer of a wide variety in healthcare reform was "unfair," Wagner said. "We provide a good benefit" at a reasonable price.

In 2009, when the Health Savings Account was voluntary, about three-quarters of employees opted for the Health Savings Account, lured by the company match to the savings account. Wagner said that over several years, he has built up so much money in his health savings account, he planned next year to opt for the $2,500 option with 20 percent co-insurance because he could pay his portion with tax-free dollars.

Wagner said employee premium payments for 2010 had yet to be determined, but as in the past, they will be on a sliding scale, with top managers paying more and the lowest-paid employees paying less. In 2009, he noted, the lowest-level employee who completed a risk assessment paid nothing for the cheapest Health Savings Account.