What Do We Know About Recent Enrollment in HSA-Eligible Health Plans?

by Paul Fronstin, Ph.D., Employee Benefit Research Institute

Enrollment in HSA-eligible health plans has grown significantly since HSAs first became available in 2004.  In 2018, enrollment in HSA-eligible health plans ranged from 23 million to 36.8 million policyholders and their dependents.   According to the National Center for Health Statistics – National Health Interview Survey, the number of people enrolled in a high deductible health plan (HDHP), with or without an HSA, increased from 25.3% of those with private health insurance in 2010, to 45.6% in 2018, with all of the recent growth coming from enrollment into HSA-eligible health plans.

Growth into HSA-eligible health plans continues to appear to be strong.  The EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey found that 19% of HSA-eligible health plan enrollees have been in their health plan less than one year and 25% have been enrolled 1-2 years.  Yet, enrollment in HSA-eligible health plans is not as large as it could be. A recent study found that 5% of HSA-eligible health plan enrollees switched to a different type of health plan. There is evidence that individuals who disenrolled from HSA-eligible health plans were more likely to have certain health conditions than those who remained enrolled in the HSA-eligible health plan.  Among individuals with no health conditions, 4.2% disenrolled from the HSA-eligible health plan. 5% of individuals with dyslipidemia disenrolled, along with 5.3% among those with hypertension or depression, 5.6% among those with diabetes, and 6.1% among individuals with schizophrenia/bipolar disorder.  Individuals with multiple conditions were even more likely to disenroll.

Several other factors may be holding back growth in HSA-eligible health plan enrollments. Delay in the Cadillac tax, recent low health insurance premium increases, and reports that find that HSA-eligible health plans may be associated with a reduction in appropriate preventive care and medication adherence, are all reasons why employers may be holding back from adopting HSA-eligible health plans. They may also cause employers that offer HSA-eligible health plans as a choice to hold back from moving to only offering HSA-eligible health plans.

At some point in the future, we may see growth in enrollment in HSA-eligible health plans because of what is happening to deductibles in health plans that are not HSA-eligible.  Between 2007 and 2018, deductibles in HSA-eligible health plans increased from $1,729 to $2,349 for employee-only coverage, a 36% increase. During the same period, deductibles in PPOs increased from $461 to $1,204, a 261% increase.  In 2007, HSA-eligible health plan deductibles were nearly 4 times as large as PPO deductibles. By 2018, HSA-eligible health plan deductibles were only twice as large as PPO deductibles. If the gap continues to fall, it is only a matter of time before employers may have to start helping those workers’ pay out-of-pocket expenses via HSAs.