A recent survey found a significant increase in health plan options in 2018 for large employers. Large employers increased offerings of both traditional and high deductible health plans from 9% to 65%.

HDHPs Gain Momentum

Large Employers Increased Offerings of Both Traditional and High Deductible Health Plans from 9% to 65%.

On top of that, 70% of large employers now include an HDHP in their health plan offerings. The enrollment data still skews toward PPOs (48% of enrollment), followed by HDHPs (35%), HMOs (7%), other small medical plans (7%) and declined coverage (4%). What is the rationale for the changes of employer offerings and employee enrollment?

Increase Costs

While there are likely nuanced factors for the changed healthcare offerings and enrollment, the driving factor in an increase in premiums costs. Insurance costs continue to rise and high deductible health plans lower costs (when compared to traditional health plans like PPOs) for both employers and employees. Economics is often the greatest driver of change. This is clearly the case in the healthcare and benefits market.

Tax Savings Options

The same survey found that HSA participation (of all eligible HDHPs) rose significantly from 50% in 2017 to 80% in 2018! HSA adoption increases are directly correlated to the increase in HDHP enrollment. The tax and savings strategies associated with HSAs are increasing adoption at a faster rate. More employers are aware of these options in 2018 and are using the HSA for its triple-tax savings benefits.

While these HSA benefits aren’t new, the need to ensure dedicated health savings and investment for today has become more important as out-of-pocket health costs rise. We need to find ways to save more, the HSA provides that option.

The movement from traditional health plans to HDHPs has been in progress for the last several years. The increase of HDHP offerings and enrollment in 2018 marks a clear shift in this trend. HSA enrollment will continue to increase as more Americans become eligible. The dedicated tax savings of an HSA will only increase the adoption.