Account-Based Health Plan Adoption On the Rise

February 10, 2015

In 2014, nearly three-quarters of employers offered their employees one or more account-based health plans (ABHPs). Another 9% expected to add an ABHP to their plan options for the plan year 2015. In addition, 16% of employers now offer ABHPs as the only plan option, more than double the rate in 2012. No other plan types saw such positive growth in 2014.

This is according to data from the 19th Annual Towers Watson/NBGH Employer Survey on Purchasing Value in Health Care, fielded in late 2013/early 2014. Respondents included 595 employers that collectively employ 11.3 million full-time employees, have 7.8 million employees enrolled in their health care programs and represent all major industry sectors.

An ABHP is an employer-sponsored health plan that combines a high deductible with either a Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA) – tax-advantaged accounts that employees can use to pay eligible health care expenses. ABHPs help employees increase their understanding of the value of the benefits that their employers provide.

The survey further revealed that in 2014, employee enrollment in ABHPs increased from 15% to nearly 33%. When offered on a private exchange, uptake was even higher, with 40 to 60% of employees enrolling in ADHPs. To make ABHP adoption even more attractive, 79% of companies that offer them contribute subsidies for their employees into the tax-advantaged savings accounts the plans are connected to.

However, there is a learning curve that comes with being a newly empowered health care consumer. And the first year of implementing an ABHP can be difficult on employees because it takes time to accumulate funds in the accounts the plans are attached to. In the meantime, employees might have medical expenses that are not covered and exceed the funds in their accounts. Employers looking to adopt ABHPs need to help their employees take a long-term view of these types of plans, beyond year one.

To aid their employees in making the transition to ABHPs, a majority of companies emphasize communication and education throughout the process. For example, 52% of employers offering ABHPs have implemented year-long communication strategies on the value and responsibilities of ABHPs. Another 20% plan to implement such communications strategies in 2015.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: