United Healthcare Report Shows Success of Health Savings Accounts
The majority of UnitedHealthcare customers with Health Savings Accounts (HSA) are depositing money into the accounts and accumulating balances, regardless of their income level, age or employer size.
UnitedHealthcare analyzed more than 200,000 of its 1.4 million members enrolled in an HSA-eligible health plan during the full year 2006 – the latest period for which full year data were available – and found that 68 percent of account holders contributed their own money to their HSAs, and 88 percent had an account balance at the end of the year, carrying over $900 on average for future use. Also, UnitedHealthcare found that enrollment rates were highest among employees of small businesses – defined as having one to 99 employees – and lower-income individuals – defined as earning less than $25,000 per year – at 74 percent and 64 percent, respectively.
HSAs deliver value across all consumer segments because individuals can take the money they save in lower premiums and use it to fund a health account. This activity is helping create more engaged consumers who better understand, and plan for, their health care expenses. Prior research from UnitedHealthcare found that members of a consumer-driven plan received preventive and evidence-based care at rates equivalent to, or in many cases higher than, members of traditional plans.
“This latest research affirms our belief that Health Savings Accounts have broad appeal for many health care consumers, regardless of income, age or employer environment,” said Meredith Baratz, vice president of Market Solutions at UnitedHealthcare. “More employers are realizing the value of health savings accounts as well, because HSAs enable businesses to help their employees play a more active role in their financial and physical well-being.”
According to UnitedHealthcare data, employer funding was a key driver in HSA enrollment rates. About two-thirds of employers provide funding to the HSA. Regardless of funding level, when an employer contributed to the HSA, 86 percent of consumers opened an account, compared with only 27 percent when the employer did not contribute. However, employee self-funding was strong regardless of employer size, especially among employees at mid-sized companies (defined as having 100 to 500 employees).
Additionally, UnitedHealthcare found that account-opening activity was consistent across age, gender and life status. Nearly 60 percent of customers eligible to enroll in an HSA plan were singles, families and younger couples. Also, 88 percent of account holders at the end of 2006 had account balances greater than zero, illustrating HSAs’ long-term savings potential.
UnitedHealthcare analyzed both health plan design and financing to assess whether all consumer segments are taking advantage of the opportunity HSAs present to plan, save and pay for health care. More complete findings and a study summary are available online at http://www.unitedhealthgroup.com/global/hsa-final.pdf. UnitedHealthcare’s affiliate, OptumHealth BankSM (www.optumhealthfinancial.com), Member FDIC, is one of the nation’s leading HSA administrators with more than $600 million in HSA balances, including $30 million in mutual fund investments, as of June 30, 2008.
Today, more UnitedHealth Group customers are enrolled in HSAs than are enrolled in health reimbursement accounts (HRAs). This reflects the continuing rise in popularity of HSAs, which have been available for four years, compared with HRAs, which have been available twice that long. UnitedHealthcare also offers HSAs to individuals and families not covered by employer-sponsored plans through its Golden Rule Insurance Company.