On April 17, 2018, the Department of Health and Human Services released the 2019 Affordable Care Act (“ACA”) out-of-pocket (“OOP”) maximums for 2019, and on May 10, 2018 the IRS released the health savings account (“HSA”) and high deductible health plan (“HDHP”) limits for 2019. For 2019, maximum HSA contributions increased 1.4%, HDHP OOP maximums increased 1.5%, and ACA OOP limitations increased 7.48%.
|HSA Contribution Limit||Self-Only: $3,450
|Catch-Up Contribution Limit (for HSA-eligible participants who turn 55 by year-end)||$1,000||$1,000|
|Minimum HDHP Deductible||Self-Only: $1,350
|HDHP OOP Maximum||Self-Only: $6,650
While employers look ahead to 2019, it’s worth revisiting the relationship between HSAs and HDHPs and how they can help employees maximize their benefits.
HDHPs are health insurance plans which offer lower premiums with higher deductibles that employees are required to meet before the plan pays a designated percentage of covered charges. This approach is thought to not only increase employee awareness about healthcare costs, but also encourage them to shop around for the best value care. For that reason, HDHPs are considered to be consumer-driven plans.
Lower premiums attract employees to HDHPs. According to Benefitfocus, 70% of large employers offer a HDHP option and 35% of employees opt in. Younger generations are especially taking an interest in them, with 40% of millennials selecting HDHPs.
Despite their popularity, HDHPs require proper support to be successful. As a result of higher deductibles, employees may be more likely to delay or skip necessary care. In fact, the Kaiser Family Foundation reports that, due to cost, 27% of Americans say they have put off or postponed getting necessary health care, 23% have skipped a recommended medical test or treatment, and 21% have not filled a prescription.
HSAs are paired with HDHPs to offset this monetary concern. An HSA is a tax-advantaged account that allows employees to save tax-free money for use towards deductibles, copayments, coinsurance, and certain other medical expenses. Both employer and employee may contribute to HSAs, and employees deduct HSA contributions on tax returns.
Prior to launching a HDHP, an educational communication strategy and a proactive outreach plan should be in place to help support employees. The plan administrator should provide one easy point of contact who can answer members’ questions, help them to understand their benefits, and become an ally in helping them obtain the highest-value care.