Study: Pre-deductible HSA coverage of chronic condition meds won't jack up premiums

Dive Brief:

A 2019 IRS notice expanded the list of medications and health services Health Savings Account-eligible health plans may cover prior to meeting a patient’s deductible. Employers that take advantage of the expansion could cover these treatments with little to no increases in patient premiums, according to an Employee Benefits Research Institute report published May 19.
EBRI found that extending pre-deductible coverage to the list of 14 treatments for chronic conditions — including items such as statins for patients with heart disease and glucometers for those with diabetes — resulted in estimated premium increases ranging from 0% to 1.5%. The small increases could be because relatively few health plan enrollees had any of the conditions mentioned in the IRS notice, resulting in low costs to cover the treatments when spread across an entire patient population, EBRI said.
EBRI also found that 81% of employers would add pre-deductible coverage for additional health services if allowed by law, Paul Fronstin, co-author of the report and director, health benefits research at EBRI, said in a statement emailed to HR Dive.

Dive Insight:

Employer-sponsored health plans faced a myriad of impacts from COVID-19, including a reduction in the use of preventative care services. The pandemic also may have pointedly affected HSAs. EBRI found in a 2021 report that the average individual HSA contribution fell between 2019 and 2020, while average annual distributions fell to an “all-time low” in 2020.

Employees may benefit from enhanced clarity about what is covered by HSA-eligible health plans, also known as high-deductible health plans. A 2017 paper by Indiana University researchers cited a prior study that showed a majority of HDHP members were unaware of cost-sharing exemptions for preventative care.

The beginning of 2022 also marked the end of the Coronavirus Aid, Relief, and Economic Security Act’s temporary provisions allowing HDHPs to cover telehealth and other expenses from remote care services before patients met their deductible. The 2022 Consolidated Appropriations Act later reinstituted this coverage on a temporary basis between March 31, 2022, and January 1, 2023.

But employers may still need to contend with a perception gap as to how HSAs are viewed. A 2020 survey by HSA administration firm Further found that while most consumers said they used their HSA as a spending resource, most employers associated HSAs with savings only.