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November 2008 return to the table of contents

CDH Healthcare Insurance Chosen By 20% Of Survey Respondents, Higher Percentage For Individuals

As the open enrollment period ends, one in five individuals surveyed who were choosing healthcare insurance opted for some form of Consumer Directed Healthcare (CDH).

In a survey of 1,021 American who chose a healthcare insurance plan this fall and surveyed by Information Strategies, Inc., (ISI), one in five (21%) reported that they opted either for an Health Savings Account (HSA), Health Reimbursement Account (IRA) or a Flexible Spending Account. (FSA).

At the same time, job separation, overall economic concerns and a less than robust economy are driving many individuals to re-think their own healthcare insurance.

More than two in five (43%) said they had look at alternative healthcare options either from outside their current employee sponsored plans or different healthcare insurance provisions such as emergency and hospital cost plans.

Almost half of all respondent (47%) said they had no choice as to plan offerings from employers or because a pre-existing condition required them to stay with their current healthcare insurance provider.

Of those with the ability to choose, 42% said they opted for a CDH offering with a majority reporting they had chosen an HSA.

One in 10 of respondents said they had been turned down by an insurance provider in the past five years with 15% of these respondents indicating they were rebuffed this year in finding a healthcare insurance policy.

While a positive sign for the CDH industry, the survey was balanced by a pessimistic outlook on the part of respondents, 7 of 10 saying they were paying more for their healthcare insurance this year than last and 8 of 10 indicating they expected to pay more when the next enrollment period comes around.

Based on talks and surveys with almost 700 HR and business leaders through November 15, there is heightened interest in HSAs, particularly as insurance providers have modified their offerings to reflect cost concerns and growing comparison shopping by companies and individuals.

A strong employer majority (61%) said they thought insurance providers were offering better HSA plans than last year while at the same time saying they were actively looking at alternative banking solutions.

Both employer and individual visitors to, an HSA information site, were up 22% in September and 23% in October.

Downloads of materials for employers and employees were almost double the traffic as compared to the same time last year.

More than 66% of employer respondents said they had spent more time choosing their plans for 2009 and have added resources to their enrollment programs going into the critical 4th quarter.

At the same time, 74% said they thought modifications in HSAs would occur in the next presidency, no matter who was the victor.

More than half, 57% said their agent/broker had offered an HSA component in their first presentations, up from just 25% in 2007.

Given the new rules, which enable companies to choose the financial institution in which to place monies for employers, 46% said they were looking at financial institutions for help in the open enrollment process.

Respondents also said they were looking at package offerings and leaning on their agent/broker to bring all of the pieces together.

One in five HR respondents said they were dissatisfied with the information and support supplied by their healthcare insurance provider and one in 10 reported dissatisfaction with their broker/agent.

More than 60% of employer respondents said they had or plan to provide monies to help fund the first year of their employees’ HSA account. The average contribution was 24% up from the 17% noted by ISI last year.

Insurance providers have embraced the concept of multiple bank offerings in association with their sign-up programs, a trend first noted in 2007 by ISI, this newsletter's parent.

The three most sought after elements in an HSA healthcare insurance plan were:

  • Lower premium costs to employer, employee.
  • Coverage of all procedures permitted by HSA regulations
  • Education programs that clearly explained HSA rules, procedures

Also reflecting a trend first noted several years ago, 52% of employer respondents said they were increasing the amount of funding being provided by employees for healthcare benefits while 11% said they were requiring employees to contribute for the first time.

With the financial aspects of HSAs being more broadly understood by employers and employees, the role of banks and other financial institutions in the process is growing.

As a consequence, financial institutions providing HSA accounts were under greater scrutiny by individuals and employers.

While priorities may vary from each company and individual, there were attributes financial institutions should be providing to help small business. According to Sovereign Bank’s Anne Struthers, Senior Vice President/Director of HSAs, they are:

Quick Enrollment - enable companies and employees to quickly enroll online as, plan as they may, many companies wait until the last minute to offer their healthcare optionsEducation - provide companies with the tools required to ensure successful enrollment and work with clients to help create marketing and contribution strategies.

Flexibility - ability to work with all health insurance providers as well as insurance brokers/agents.

Service - In house service agents who understand the issues and are dedicated to quality service.

In a research study currently being completed by ISI, Sovereign Bank was judged as one of the most responsive in these four areas by more than 300 business leaders surveyed. To learn more about Sovereign’s HSA program for employers, click here.


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