Popular with Millennials, HDHPs paired with HSAs can help employers improve employee satisfaction with healthcare benefits.
Millennials are Embracing HDHPs
Millennials are active supporters of consumer-directed healthcare. Now in their late 20s through early 40s, they tend to be healthier than their older workforce peers (Gen X and Baby Boomer generations) and, on average, spend less on healthcare costs.
Nearly half of Millennials who are eligible for an HSA through their employer are adopting one. They like being able to use the accounts for healthcare expenses now and retirement expenses in the future.
As savvy healthcare shoppers, Millennials like having control over their dollars and being able to make more informed decisions. In addition, many HSA programs include wellness incentives, such as helping people kick the smoking habit.
TPAs Complete the Picture
McKinsey & Co.’s latest Employer Health Benefits Survey indicates that employers perceive high-deductible health plans as a viable option for managing rising medical costs and are increasingly satisfied with the HDHP/HSA option.
HSA administration could be the answer for TPAs looking to boost their bottom line by increasing service offerings. TPAs have the benefits knowledge and experience to jump into this market and hit the ground running. Currently, the biggest competitor for TPAs in the HSA market is banks, who sometimes offer HSAs for free, usually with few if any associated services.
HSAs enticements for account owners include tax-free contributions, withdrawals, and earnings. However, workers also need convenient access to account funds (e.g., a debit card) and a mobile app from which they can view account balances and submit claims, among other functions. Offered primarily by TPAs, these perks can help increase enrollment, especially among the tech-inclined Millennial workforce.
A Winning Combination
Millennials are becoming more health- and cost-conscious. Employers are looking to reduce costs while maintaining a healthy, satisfied workforce. HDHPs offer lower premium costs, and when paired with an HSA, create a group coverage option that can prove attractive to both parties. TPAs looking for opportunities to grow their businesses should consider adding HSA administration services to tap into this winning combination.
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