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January 16, 2011
HSA Plans And HRAs Grow By 27 Percent
Health Savings Accounts and Consumer-directed Health Plans (CDHPs) offer greater control over health care expenses. That could be what is behind the rapid growth in popularity of these Health Savings Accounts, which had been set up by an estimated 23 million people in 2009. That was a 27 percent increase over 2008, according to Mercer’s National Survey of Employer Sponsored Health Plans by the American Association of Preferred Provider Organizations (AAPPO).
Karen Greenrose, the president and CEO of AAPPO, said, “We also saw small employers turn to CDHPs at a much greater rate, largely due to this cost savings. CDHPs, which are predominately built on PPO networks, offer the affordability, choice and access that employers and consumers alike are looking for.”
This analysis also indicated that employers prefer health savings accounts, but employees are enrolling in Health Reimbursement Accounts (HRAs) at a higher rate. HRAs require an employer contribution, but Health Savings Accounts allow contributions from both employers and employees.
Health Savings Accounts offer employees greater control over account balances. HRAs can be taken back by the employer at the plan's year-end, but HSA Plan funds roll over to the following year. Employees also retain these account balances if they lose their job, switch to a different job or retire.
Posted by Wiley Long at January 16, 2011 11:02 AM