A top rated health insurance website recently presented data on their HSA sales over their internet site. The data was consistent with confidential data a coalition in D.C provided to the Medicare House and Senate Conference late last year. That is, HSAs appeal to the older consumer. In fact, 56 percent of purchasers are more than 40 years old. Most purchasers of HSAs are families (62 percent), and the HSA monthly insurance premiums are less than $100 for 71 percent of the company’s HSA purchasers.

The Members of Congress who held the events in their districts held a news conference in the U.S. Capitol on April 21, 2004. Three television cameras filmed the press conference and about a dozen reporters covered it. In addition to U.S. Majority Leader Tom DeLay, Brent Glover, the construction superintendent who saved $324 a month while fully funding his HSA, provided an HSA testimonial. During the description of his HSA, Mr. Glover said, “I am earning more interest in my HSA, than I am in my 401(k).”

Benefits Brokers See Employer Interest in HSAs Growing

WHITE SULPHUR SPRINGS, W. Va.--(BUSINESS WIRE)--June 2, 2004--As medical insurance premiums continue their rapid climb, employers across the country are showing considerable interest in new, high-deductible Health Savings Accounts (HSAs) as a possible solution to the rising cost of worker health care.

The interest in HSAs was reported by large commercial insurance brokers in the latest benefits marketplace survey by The Council of Insurance Agents & Brokers. The Council represents the nation's largest insurance brokers who annually write 80 percent of the commercial property/casualty insurance premiums and administer billions of dollars in employee benefits accounts.

The Council released the findings from its semi-annual benefits marketplace survey today at the opening of the third annual Employee Benefits Leadership Forum at The Greenbrier. The conference runs through Saturday, June 5.

Fifty-five percent of brokers responding to the survey predicted HSAs would be a significant or very significant coverage option for private employers, and 29 percent said they thought the new plans would be moderately important. The brokers said one key to the popularity of the new program is the government's planned use of an HSA option in federal workers' health plans.

The brokers said it will take time before there is wide acceptance of HSAs, which are employee savings plans that can offset expenses incurred before high deductibles are met. They also could be used for post-retirement medical expenses.

"It will take a few years, but HSAs will be a successful option for all size employers," said a broker from the Southeast. "It will be gradual, but it will be significant."

"Most important change in the provision of health insurance coverage in 20 years," added a respondent from the Southwest.

"HSAs have not yet taken off, but there is a lot of interest," said a Midwest broker.

A broker from the Northeast said HSAs, which were created under the Medicare drug law passed by Congress last year, will become the "health IRA" and predicted their greatest impact will be on consumer-driven health plans and retiree health costs.

But although the plans may help employers hold down their outlays for health insurance and may be an attractive savings vehicle for individuals because they grow tax free, several brokers said they believe HSAs will benefit white-collar and higher wage employees more than blue-collar and lower-wage workers.

The survey also showed that the average premium for group medical coverage has increased 10-30 percent for nearly three-quarters of all small accounts since the last survey in November 2003. Nearly three-quarters of the medium-sized accounts saw their premium rates increase 10-20 percent. Thirty-nine percent of large accounts experienced increases of 1-10 percent, and 39 percent also reported increases of 10-20 percent.

The most frequent tool used by employers to offset those rising costs continues to be a pass-through of costs to employees, either through higher deductibles and co-pays, or increased employee contributions to the cost of coverage, prescription drug co-pays and up-front hospital and outpatient co-pays.

Most employers still are resisting limiting a worker's out-of-network options or shifting to either consumer-driven or defined-contribution plans, the survey showed, and it is even rarer for an employer who is offering health care coverage to drop that benefit altogether.

Group life insurance rates remained predominantly flat or experienced only small increases in the 1-10 percent range for all sizes of accounts, the survey showed.

Employees are most likely to buy life insurance, dental insurance or vision care coverage as a voluntary benefit offered through the workplace, with short-term and long-term disability insurance as the next most popular voluntary benefit products for employees. Catastrophic medical coverage or long-term care insurance is the least likely benefit to be purchased in the workplace.

The Council of Insurance Agents & Brokers is the voice of the market leaders and the premier association for commercial insurance and employee benefits intermediaries in the United States and abroad. From its headquarters in Washington, DC - with programs conducted throughout the nation and world - The Council represents the largest, most productive, and most profitable of all commercial insurance agencies and brokerage firms. Only the top one percent of all agents and brokers qualify. The Council's members in more than 3,000 locations, place 80 percent -- well over $90 billion -- of all U.S. insurance products and services protecting business, industry, government and the public at-large, and they administer billions of dollars in employee benefits. Since 1913, The Council of Insurance Agents & Brokers has worked in the best interests of its members, securing innovative solutions and creating new market opportunities at home and abroad.