One of the top client objections to the combination of a qualified high-deductible health plan and a health savings account (HSA) is the idea that there are mountains of paperwork and numerous administrative issues. Nothing could be further from the truth, however — and it is your responsibility to understand exactly how these plans work, find appropriate solutions, and pass this knowledge on to your employer clients.
In order to survive the next few years in the health market, you will have to get into the field of consumer-driven health plans (CDHP). But there is no reason to feel overwhelmed: HSA administrators are not like insurance plans — you don't have to learn all the ins and outs of every single administrator. As an example, if you were purchasing a PDA, you wouldn't take the time to learn every single detail and application that every single BlackBerry, iPhone, and Palm Treo had to offer. You would make a checklist of the items you needed, find the phone that provided you with the best solutions, and purchase that one phone.
Finding an HSA administrator is not much different than finding an administrator for flexible spending accounts or COBRA. It is your responsibility to understand and vet the provider of the services you're considering. Once you find the one that solves your problems, you stick with them most of the time.
What to look for
When HSAs first came on the market, the process included heavy paperwork and confusion as regulations poured out of the IRS. Today, however, there are several HSA administrators that have jumped to the head of the pack in streamlining that administration of both the bank account and the coordination with the benefits delivery system. When looking for administrators, your checklist might look something like this:
- What educational materials are available?
- How are educational materials distributed?
- Online enrollment: Can the database be prepopulated via Excel uploads?
- Are online HSA calculators available?
- Which account types are available (interest-earning savings account, investment options)?
- Which reimbursement methods are available (debit cards versus stored-value cards)?
- What reporting methods are used?
- Are updates or EOBs sent monthly?
- How easily can an accountholder review contributions and distributions?
- Are they within IRS guidelines? Are they alerted if not?
- What's the customer service like?
- Are trained personnel available to answer questions?
- What is the response time?
Leveraging the use of online applications and use of debit/stored-value cards almost completely removes any client objections to paperwork. In fact, after the initial installation of the HSA account, administration should drop to nearly zero. In the case of groups that replace all plans with a qualified high-deductible health plan, there is a noticeable reduction in the types of problems associated with traditional plans. Claims issues and employee complaints about access to HMO providers and referrals, in other words, are no longer an issue.
One very important discussion you must have with your client is the idea of the all-in-one approach. Many of the larger insurers have set up their own HSA administrators, not only to increase market share, but to solve this issue of excess paperwork and administration. Often, the employee can choose to have the employee deductible and co-insurance responsibilities automatically pulled from their HSA account. This alleviates the accountholder from having to submit for reimbursement.
This additional product will tie the insurer to the employer for a longer period of time because changing the HSA administrator creates a larger burden than a simple change in insurance carrier. The arguments are straightforward.
