Alliance To Critique HSA Sellers
Wanting to drive quality and help employers better understand what they are buying, the Alliance for Health plans to critique companies that sell health savings accounts in West Michigan.
The Alliance for Health, a health-care planning agency that consists of employers and care providers in the region, will work with Varnum Consulting of Grand Rapids to collect and analyze data to identify the strengths and weaknesses of HSA vendors in the marketplace.
The goal is to drive continuous quality improvements through an annual report card that will use performance measurements that create a benchmark for best practices among HSA vendors. HSA vendors and administrators can then use the information to gauge their own performance, and employers can use it as they weigh incorporating the new-style benefit into their employee health benefits.
“How do you buy these things if you’ve never done this before? If they’re going to be here, people have to have a way to talk about them,” Alliance for Health President Lody Zwarensteyn said. “We’re kicking off something that really has the potential to affect the market.”
Using the model behind the Valued Improvement Partnership program, a decade-old initiative that reviews managed-care plans in the market, the Alliance for Health is asking banks, credit unions and other financial institutions that sell and administer HSAs to voluntarily complete a request-for-information survey developed with employers. The inaugural request for information will focus on these key areas: operational competency, information technology and security, customer service, integration with health plans, and financial and value-added services.
The Alliance for Health and Varnum Consulting plan to issue the first report card on HSAs in June for vendors and employers and then publish a public consumer guide in August, which in the first year will only offer a summary of the inaugural results. A detailed consumer will begin with the second year of the program and should come out by mid-2006, Zwarensteyn said.
As HSAs increasingly gain the attention of employers, the need exists to provide an objective analysis of vendors to compare products based on a set benchmark, said Brigett White, a senior consultant with Varnum Consulting.
“When do we know it’s good and when do we know it’s not good, and when do we know we’re accomplishing a strategy or outcome?” White said. “We are creating the framework that other people will use for their own judgment.”
Created under the federal Medicare Reform Act enacted in late 2003, HSAs are combined with lower-cost, high-deductible health plans. They work in similar fashion to IRAs or 401(k) retirement plans by allowing employees and employers to make pre-tax contributions to a tax-free savings account.
Participants use the money in their HSA to pay for medical expenses or deductibles or co-pays on their health plan.
Anyone under 65 years old who is covered under a high-deductible health plan or insurance policy — with a minimum $1,000 deductible for individuals, or $2,000 deductible for families — may form an HSA.
Employees or their employers, or both, can contribute up to the amount of the health plan’s deductible, to a maximum $2,650 a year for individuals or $5,250 annually for families, into the account. Account balances roll over from year to year and employees take accounts with them from one employer to another.
A new report from global human resources consultant Hewitt & Associates indicated that employer interest in HSAs is growing.
Hewitt & Associates reported that just 3 percent of the 500 major employers in the U.S. surveyed plan to provide an HSA and contributions as an option for employees in 2005, but 57 percent are considering it for the future.
As commercial insurance carriers and managed-care companies respond to market demands and craft new high-deductible health plans that work with an HSA, many banks are stepping into the equation to handle the critical financial-management side.
In offering HSAs to employers, banks are seeking to leverage their money-management expertise to handle employee payroll contributions, provide investment opportunities for the money deposited into individual accounts, prepare monthly statements and provide a debit card or checkbook that individuals can use when paying for a medical expense with funds in their HSA.
With banks becoming the new player in the complex health benefits arena, providing an annual report card on how they’re performing and feedback from the market can help to set market standards and avoid the pitfalls and consumer backlash for HSAs that the managed-care industry experienced in the 1990s, said Ed Ozark, a senior consultant with Varnum Consulting.
“Get it right the first time,” Ozark said. “We’re getting out in front of the curve and we’re going to work with the providers up front. We’re setting market expectations.”