There’s a good chance during open enrollment this fall that you will be offered a high-deductible insurance plan with a savings account — if you haven’t already been nudged into one.
Increasingly, employers are offering this as a way to rein in their health insurance costs. The high deductible means lower premiums, benefits experts say. And employees — confronted with the prospect of potentially paying thousands of dollars before insurance kicks in — are less likely to run to the emergency room for minor problems, which keeps costs down.
The plan frequently is paired with a health savings account, in which workers may set aside pre-tax money to cover the deductible and other medical costs. Employers sometimes chip in, too, to encourage participation.
This year, 19 percent of workers with insurance from an employer were enrolled in a high-deductible plan, more than double the percentage from just three years ago, according to the Kaiser Family Foundation. And these plans have edged out HMOs as the second-most-popular option offered by employers, benefits consultant Aon Hewitt reports.
Highmark Inc., the largest health insurer in Pennsylvania, said 186,000 of its members chose one of its high-deductible plans at the beginning of this year, up from 23,000 in 2006. And while representing just 4 percent of Highmark’s 4.9 million members, the numbers continue to grow, spokeswoman Kristin Ash said.
“We continue to see trends of more and more group customers offering high-deductible health plans,” Ash said.
Studies suggest that these plans reduce health care costs — at least initially.
“They are seeing a savings. The question is why and if it’s sustainable,” said Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute. “The jury is still out.”
With employers’ health care costs rising, more are willing to try high-deductibles. Some are beginning to make this their only choice.
Health savings accounts started to appear in 2004. Employees can contribute untaxed money into this account and use it later to pay deductibles and other medical expenses. For 2013, the most that can be contributed to a health savings account is $3,250 for an individual and $6,450 for those with family coverage.
Any money unused at the end of the year stays in the account and can earn interest or be invested. Workers who leave can take the money with them.
Health savings accounts are different from flexible spending accounts, another popular option in which employees set aside money for health expenditures but the cash must be spent annually or it’s forfeited.
High-deductible plans often are called consumer-directed health plans, implying patients will question their doctors on whether a test is needed or insist on generics over brand-name drugs.