CDH Participant Trends: Tax-Advantaged Account Perceptions Mid-Year Research Snapshot

Transcription

1 CDH Participant Trends: Tax-Advantaged Account Perceptions 2017 Mid-Year Research Snapshot

2 Study Overview ConnectYourCare (CYC) conducts regular surveys to access consumer-directed health care (CDH) market trends, member perceptions, account adoption, and utilization. This report profiles key findings from a mid-year study of over 23,000 respondents and covers Health Savings Accounts (HSAs), Health Care Flexible Spending Accounts (FSAs), Dependent Care Flexible Spending Accounts (DCAPs), and Health Reimbursement Arrangements (HRAs). One of the most insightful trends this mid-year survey report reveals is the variances in responses amongst the generations. While mid-career workers are the most concerned about increased premiums and rate themselves as fairly knowledgeable on how these accounts benefit them and their families, they are also the greatest spenders. The greatest savers tend to be those under age 25, followed by those closest to retirement. Respondents under the age of 25 are the most worried about paying for unanticipated health care expenses while also the least knowledgeable of the tax-advantaged accounts designated for just that purpose. It is no wonder there is such an enrollment gap in HSA/High Deductible Health Plans (HDHP)--a recent Mercer survey found HSA/HDHP enrollment to be only 24% i. Ironically, the CYC mid-year study finds that 80% of respondents think their employers do a good job of communicating benefits information, which is not reflective in before-mentioned industry enrollment figures. Employers can achieve adoption goals by working with providers to continue to push education and consumerism with messaging designed for each demographic appropriately, enabling employees to make well-informed decisions. i Mercer National Survey of Employer-Sponsored Health Plans, 2016 Knowledge and Employer Communication Please rate your knowledge on how your account works. 31.1% Very 48.5% 2% Not At All 18.4% Somewhat How effective is your employer at communicating the benefits of tax-advantaged accounts? Scale of 1-10, with 10 being extremely effective. 24.8% Extremely Effective 16% 17.4% % Don t Know % Not Effective At All % 1.7% 2.9% 6.7% 2.8% 7.5% 80% say they are knowledgeable By Account Type: Account Type DCAP 84% FSA 85% HRA 73% HSA 78% 75% believe their employer is effective By Account Type: Account Type Effective DCAP 76% FSA 75% HRA 68% HSA 79% 2 ConnectYourCare CDH Participant Trends: Tax-Advantaged Account Perceptions 2017 Research Snapshot

3 Health Care Concerns Today s tax-advantaged account enrollees are thinking about the future, but the immediate future is of greater concern. Increasing insurance premiums and paying for unanticipated health care expenses top the list of worries. What health care issue concerns you the most? Increasing insurance premiums Paying for unanticipated health care expenses Paying for health care in retirement Potential impact of health care legislation reform Estimating cost of upcoming health care procedures 7.9% 12.5% 31.5% 26% 22.1% Health Care Concerns by Age When segmented by age, retirement is not the highest priority until after age 55. Premiums and unexpected expenses remain the highest priorities for all under 55. What health care issue concerns you the most? Value < >65 Increasing insurance premiums Paying for unanticipated health care expenses Paying for health care in retirement Potential impact of health care legislation reform Estimating cost of upcoming health care procedures 23.8% 36.9% 38% 34.6% 25.1% 29.9% 34% 34.7% 31.4% 28.4% 20% 17.6% 14.8% 4.8% 7.8% 17.5% 37.4% 30.9% 13.8% 12.3% 12.4% 11.7% 12.3% 16% 13.7% 11.3% 10.4% 7.7% 5.3% 5.6%

4 Perspectives by Age Under 25 least knowledgeable, least likely to rate their employers as effective communicators. Please rate your knowledge on how your account works. All < > % 74.70% 75.3% 80.3% 80.20% 81.1% 79.5% Least Most How effective is your employer at communicating the benefits of tax-advantaged accounts?* All < > % 75.12% 79.14% 80.31% 84.12% 82.66% 81.02% Least Effective Most Effective HSA Spender vs Saver by Age Youngest and oldest are most likely to be savers; those ages are most likely to need their funds for today s health care expenses. How would you characterize your HSA usage habits? Saver Persona All < >65 I try to save/invest HSA funds as much as possible for retirement or for large expenses in the future. 18.2% 25.6% 18.1% 15.1% 15.7% 20.6% 22.1% Biggest Savers Biggest Savers Spender Persona All < >65 I regularly use my HSA funds throughout the year to pay for out-of-pocket costs. 81.8% 74.4% 81.9% 84.9% 84.3% 79.4% 77.9% Biggest Spenders Biggest Spenders 4 ConnectYourCare CDH Participant Trends: Tax-Advantaged Account Perceptions 2017 Research Snapshot

5 HSA Usage Habits and Investments Significantly more HSA enrollees say they are spenders vs savers. Most HSA investors plan to withdraw funds over time as needed instead of accumulating funds for retirement. Very few view the HSA as a savings account for non-health care retirement expenses. Non-investors cite low balances and lack of knowledge (investment option awareness and how to get started, 43.5% combined) for not investing. How would you characterize your HSA usage habits? 81.8% Spender I regularly use my HSA funds throughout the year to pay for out-of-pocket costs. 18.2% Saver I try to save/ invest HSA funds as much as possible for retirement or large future expenses. Investors: How do you expect you ll use the bulk of your HSA funds? Withdraw from time to time for major medical expenses Save and grow for future health care needs in retirement Save and grow for non-health care spending in retirement (non-health care spending is taxed at regular income rates) 62.9% 17.7% 14.7% Non Investors: What prevents you from investing your HSA funds? Amount of funds in my HSA 36% Was not aware of investment options 26.9% Not sure how to get started 16.6% Concern with investment loss/risk tolerance 8.8% Other, please specify 11.7% 43.5% Participants speak out: What prevents you from investing your HSA funds? An HSA is not an investment vehicle; it is a health care cost vehicle. I can t afford to contribute to my HSA because I can t afford to bring home less pay. I currently use all my HSA funds to cover health care expenses. There is no balance left to invest. Participants speak out: What other uses do you have for your invested funds? I have a lot of health care expenses. My goal is to contribute the maximum each year to try to cover my out-of-pocket amount for the year. This way, I am maximizing my tax savings. I plan to save and grow my account for future medical expenses. However, I like to use it now for medical, dental, and chiropractor expenses that are not covered by insurance. ConnectYourCare CDH Participant Trends: Tax-Advantaged Account Perceptions 2017 Research Snapshot 5

6 About ConnectYourCare As one of the largest and most responsive providers of health care savings accounts and awardwinning solutions, ConnectYourCare is rooted in creating better, more efficient connections among the people who provide benefits, the people accessing services, and the people who deliver services. Blue chip organizations across the country turn to ConnectYourCare for our highly rated customer service and best-in-class member experience, advanced educational tools for better-informed choices, and acceleration of savings with ROI efficiencies and simplification of processes. Recognizing the user expectations discussed in this report, ConnectYourCare has gone to great lengths to develop unique, customer-focused solutions, such as: The patent-pending HSA On Demand, which provides participants with accelerated access to future HSA contributions at the beginning of the plan year ClaimsAlly, an advanced technology platform designed to increase auto-substantiation rates for FSAs and other notional accounts The ConnectYourCare Health Care Stack, a life savings model, illustrates the near- and long-term financial benefits and savings one can achieve by leveraging pre-tax savings accounts made available by the IRS up through retirement There is a unique solution for every company and employee, and we won t stop working until we connect you with the perfect one. Connect with us! connectyourcare.com/blog facebook.com/connectyourcare twitter.com/connectyourcare linkedin.com/company/connectyourcare youtube.com/connectyourcare For more information, visit connectyourcare.com For sales inquiries, please visit connectyourcare.com/sales-request or call SMRTCDH ( ) ConnectYourCare. All rights reserved. ConnectYourCare and the ConnectYourCare logo are registered trademarks of ConnectYourCare, LLC. This document is provided for information purposes only. No part of this document constitutes tax, financial, or legal advice. HSA On Demand is a registered trademark of ConnectYourCare, LLC.