by Chris Bettner, Sterling Executive Vice President of Business Development
From the beginning 10 years ago, I’ve been the evangelist for health savings accounts (HSAs), regardless of the employer group, group size, location or any other criteria. HSAs work! Plain and simple. The results speak for themselves. Groups that have been with Sterling since 2005 have grown large average balances and embrace the concept. HSAs offer the ability to use the money anytime tax-free for qualified healthcare expenses. Furthermore, the option for members to use the money as an asset aggregator for their heirs or “retirement account” for themselves is of importance to many.
Not all of our members are wealthy or part of big business. We have a Teamsters Trust, a landfill company, small mom and pop shops, schools, municipalities, high tech companies, consumer goods companies, agriculture companies, etc. We’ve had many of these clients since 2005. It’s clear that the HSA concept works for every organization type and the employees who work there.
HSA growth charts look like hockey sticks due to a bit of a slow start before a steep rise in acceptance. And the growth isn’t stopping anytime soon. According to a recent Interpro Publications analysis, HSAs are projected to hit the 50 million mark by 2020. That’s in comparison to 22 million today. In this first decade since HSAs were introduced in 2004, the number of accounts grew by about 2 million accounts per year. We have seen acceleration in the past 18 months. And in just 6 short years, the number is expected to more than double! This is proof that the concept works, is here to stay and that healthcare reform will not hinder growth.
Account balances are now in excess of $15 billion. That is an increase of 32% in one year. Remember the power of the 401(k). The same logic applies in the HSA category, but with more flexibility and triple tax advantages.
HSAs promote wellness. As more and more HSA administrators offer and support transparency tools to educate consumers on the cost of healthcare services, we will see additional “savvy consumers” over a period of time. The big impact comes from the 70 million baby boomers that ask for information about healthcare services, question medical providers about necessity, and “shop” for care.
Over the past 10 years, many employer groups have moved from providing HSAs and high deductible health plans (HDHPs) as one of many options to being a primary option with fewer or no alternatives. In some cases, it is the only option offered. Employers understand the power of their contributions to engage employees and generate acceptance of the HDHP offering.
Investment options are more important to members today than they were in the early years. Many members have grown their HSA account balance and now have a comfort level with investing the money outside of their managed account. Members want the freedom of choice to invest money in their HSA on their own or through a broker of their choice.
HSAs also help to hold down costs in many ways, especially premium costs for the employer due to employees being mindful of their healthcare spending, wellness initiatives, transparency to the end consumers, etc.
About Chris Bettner
With over 30 years of experience in healthcare sales and management with health insurance carriers, Chris Bettner serves as Executive Vice President of Business Development for Sterling Administration and was a co-founder of the company in 2004. Prior to joining Sterling, Chris was Vice President of Sales for Blue Shield of California. She held similar positions at Lifeguard, FHP, Independence Blue Cross and MetLife. Chris is also a national spokesperson on HSAs and consumer directed healthcare programs. Connect with Chris Bettner on LinkedIn.