There is a great article from the Nov/Dec 2013 Healthcare Consumerism Solutions by the CEO of United Benefit Advisors. The article is based on an employer health plan survey that United Benefit Advisors performs.
Health Reimbursement Arrangement (HRA) Average Annual Funding by Employers:
- Single Employee: $1,766
- Family: $3,506
Health Savings Account (HSA) Average Annual Funding by Employers:
- Single Employee: $574
- Family: $958
From this information, you can see that employers are willing to fund HRAs with more dollars than HSAs. One potential reason for that is the great control the employer has over the HRA dollars. If the employee leaves, the HRA dollars do not go with them and the employee cannot spend the HRA dollars on non-healthcare expenses.
What does this mean for employee benefits professionals and healthcare consumers?
- In our Compass experience, we have seen more HRA utilization by clients over HSA—and the super-successful company Serigraph that kept its healthcare trend flat for the past 10 years and was the subject of the book ‘The Company That Solved Healthcare’ also uses an HRA, not an HSA. Additionally, Compass has seen more success with employers that fully fund the HRA at the beginning of the year, rather than over time.
- Finally, these account-based plans are well within the Obamacare requirements of individual out-of-pocket maxes of $6,350 for an individual and $12,700 for a family.
Click below to access the Compass Overview YouTube Video: