Summer is winding down, which means the kids are headed back to school, football season is underway and open enrollment for health care is right around the corner.
This year has been particularly active in the health-care landscape from a policy standpoint. With the addition of individual coverage health reimbursement accounts (ICHRAs), excepted benefit health reimbursement accounts and expanded preventive care benefits, employers have more options to consider as they head into the 2020 plan year.
The increase in choice could lead to more employers exploring a move away from the popular high-deductible health plans (HDHPs), said Karen Frost, vice president of health strategy and solutions at Alight.
“We’re seeing employers not only look at high-deductible plans as a source of their future health-care strategy, but they’re looking for what’s next beyond high-deductible plans,” Frost said. “Over the past several years we were seeing a trend of employers moving toward only offering high-deductible plans, what we’re starting to see is employers offering those as an option.”
The main impetus behind employers exploring other health-care options is because of the rising costs of health care, which, coincidentally, was what led to the popularity of HDHPs in the first place.
“They became increasingly popular, because they were very cost effective for employers and employees,” Frost said. “But when those deductibles begin rising, they can be a barrier for people, especially at lower-income brackets, to get care. So, employers are trying to respond to those needs by looking at other options that are equivalent to or lower cost, but don’t have that deductible.”
Organizations now have the option to reimburse employees who purchase health insurance in the Patient Protection and Affordable Care Act’s individual market through ICHRAs with the finalization of Trump administration rules. Frost said employers are expressing interest in utilizing HRAs but said there likely won’t be much movement on it for the upcoming 2020 plan year.
Additionally, contribution limits for health savings accounts (HSAs) have gone up compared to 2019 limits for all types of coverage, including employee only, employee plus family and catch-up line contributions for employees 55 and older. HSAs are a critical component of HDHPs and Frost said more employers are stressing the importance of them and providing more education around how to properly use them.
“Employers are encouraging employees to spend their HSA dollars wisely. Instead of spending it on an office visit, save it for that emergency situation that you didn’t know you were going to have,” Frost said. “Over time, help people build up an account balance that ideally covers the full deductible, but maybe their full out-of-pocket maximum. Knowing a HSA can accumulate those dollars gives employees peace of mind and they can take HSA balances into retirement to pay for medical expenses in retirement.”
The U.S. Treasury and IRS issued guidance on adding treatments for a range of chronic conditions to the list of preventive care benefits that may be provided by HDHPs with a HSA. The IRS guidance paired with The Health Savings for Seniors Act, a bipartisan bill introduced in the U.S. House of Representatives that would allow people enrolled in Medicare to open and contribute to a HSA without any changes to their preexisting coverage, provides new opportunities in health care.
Specifically, the bill adds preventive care benefits for chronic conditions such as diabetes, asthma, depression and heart and liver disease provided by a HSA-compatible or HDHP.
“For people with particular chronic conditions, that was an even bigger barrier, because they knew they’re a diabetic the insulin expense was going to go toward their deductible and that could be fairly pricey,” Frost said. “With the inclusion of some of those expenses as preventive care, more individuals will be able to take advantage of high-deductible plans who might not otherwise have them. It’s a big win for individuals with chronic conditions and it’s really good news for employers in terms of high-deductible plan enrollment.”
Frost said the main theme for employer sponsored health care is organizations are continuing to balance affordability and choice for their employees.
“These trends are a reflection of that journey of trying to find quality, cost-effective coverage,” Frost said. “As far as the rules changes, we see those as helpful for employers on that same journey. Anything that gives employers more flexibility at doing the right things for their employees is a good thing.”
About the Author
Brett Christie is a staff writer at WorldatWork.