HSA-Eligible Plans Cover Increased Use of Certain Medical Services, EBRI Finds
Following a 2019 IRS policy change, 75% of large employers offering HSA-eligible plans have expanded their pre-deductible coverage for chronic condition-related medication.
There has been an increase in the use of three of seven medical services and prescription medications by enrollees in HSA-eligible plans, compared with usage by enrollees in non-HSA-eligible plans, according to new research from the Employee Benefit Research Institute.
An IRS notice published in 2019 allowed HSA-eligible health plans—also called high-deductible health plans—to cover 14 medications and other health services used to prevent the “exacerbation of chronic conditions prior to meeting the plan deductible,” according to EBRI.
This allowed HSA-eligible health plans to adopt a more flexible benefit design, offering more protection for certain medical services through a “value-based” insurance-design plan structure.
In its most recent study, EBRI looked at the impact of the IRS notice on pre-deductible coverage in HSA-eligible health plans, and analyzed the usage of the following seven medical services: blood pressure monitors, peak flow meters, HbA1C testing, INR testing, LDL testing, glucometers and retinopathy screening.
The research institute found that, between 2018 and 2021, the use of low-density lipoprotein testing, hemoglobin A1C testing and retinopathy screening increased by a larger percentage among enrollees in HSA-eligible health plans than among those with health plans not targeted by the IRS policy change. These medical services are associated with chronic conditions like heart disease and diabetes.
Additionally, use of selective serotonin re-uptake inhibitors, statins and angiotensin-converting enzyme inhibitors increased by a larger percentage among enrollees in HSA-eligible plans.
EBRI noted that usage may not have changed for all of the targeted services and prescription drugs as a result of the IRS notice, because many employers had substituted copayments and/or coinsurance for deductibles.
2021 was also the first year that many employers expanded pre-deductible coverage.
“It may take time for enrollees with the above health-care conditions to learn that their health plan has changed coverage for certain preventive services,” the report states. “They may not be aware of the change in plan design, despite employers’ best efforts to inform enrollees of a plan design change that is considered an improvement in benefits.”
About 63% of enrollees with an HSA-eligible health plan spend less than 30 minutes choosing a health plan, according to EBRI. It ultimately comes down to employers educating their workers about how the company’s health care coverage has changed and what services are now available to them.
Meanwhile, recent Aon research predicted that average costs for U.S. employers that pay for their employees’ health care will increase 8.5% to more than $15,000 per employee in 2024, as health insurance premiums are on the rise.
EBRI found, however, that the response to expanding pre-deductible coverage for the 14 services listed in the IRS notice has been low. Enrollment into HSA-eligible health plans has also been unaffected by the expanded services, but, on the positive, EBRI reported that enrollees are paying a smaller share of the total cost of services, as cost sharing has shifted more from deductibles to copayments and coinsurance.
This finding is significant, as increases in consumer out-of-pocket costs for health care have been associated with increased financial stress, worse disease control, more hospitalizations and exacerbation of health disparities—particularly for people with chronic medical conditions and a lower household income.
“Employers and policymakers have an appetite for more flexible plan designs or ‘smarter’ deductibles because rising health-care spending has created serious fiscal challenges,” EBRI stated. “Smarter deductibles accommodating services preventing the exacerbation of chronic conditions might be a natural evolution of health plans. Value-based reimbursement promotes the delivery of evidence-based, high-quality care that encourages use of—rather than creating barriers to—high-value services.”
The IRS also recently raised the HSA contribution limit, for 2024, to $4,150 for an individual and $8,300 for a family. This is up from $3,850 for an individual and $7,750 for a family this year.