How HSAs, millennials and consumerism are changing health care
Similar to the idea of cord-cutting cable television services, millennials are increasingly ditching traditional primary care models and opting for health savings accounts or HSAs.
Millennials grew up in an Internet-enabled, “on-demand” world where a few clicks or swipes can facilitate all types of purchases, from food deliveries to ride shares to movies and everything in between. This consumerism is now driving the need for companies to rethink how they offer, price and deliver health care services. Similar to the idea of cord-cutting cable television services, millennials are increasingly ditching traditional primary care models and opting for health savings accounts or HSAs.
Technology drives consumerism
Today’s workforce has a broad range of tools to research, compare and procure health care providers and the services offered. This consumerism is driven by mobile apps, as well as telemedicine options that do not require a physical visit to a doctor’s office. Moreover, health care providers are also embracing technology to automate the service experience, including patient health portals to view medical records and schedule appointments, live chat with customer support and reminder texts.
Technology and automation are supercharging consumerism. Creating choice offers a unique opportunity for health savings accounts, especially for younger people who can build up a health care piggy bank if and when they need to draw from it.
The benefits of HSAs
Younger people tend to require less health care services compared to older generations; thus, HSAs offer a flexible viable tool that gives them control of how and to who they receive services from. Assuming they only need an annual physicals and regular dental check-ups, the costs are significantly lower and provide a way to build a tax-free health care account.
Also read: 12 reasons why I love HSAs
When they need to see a doctor or specialist, millennials can research the best options and then use their HSA to pay for it. This approach is making health care more competitive. From an employer’s perspective, aggregate health care costs, typically the highest expense after salaries and rent, are significantly lower, to the tune of 20 percent to 25 percent.
Escalating health care costs are driving up premiums, making it harder for employers and employees to strike the right balance. HSAs are a great way to save for that health care rainy day. The HSA balance rolls over from year to year, providing the flexibility and control to manage health care dollars. Unlike health reimbursement arrangements or HRAs, which are employer owned, HSAs are employee-owned. If they quit a job, are fired, retire, or change jobs, the HSA is theirs along with all the money in it. In the event an employer offers an HSA that works better for the employee, they can roll the money from the old account to the new plan.
HSAs are interest-bearing accounts that will grow over time. As a result, they can be utilized as a long-term investment account, especially for younger workers. The ultimate goal is to lower health care costs and provide choice for consumers. Setting up an HSA is one of the best financial decisions a millennial can make to prepare for the uncertainty of the future.
Steve Rosenthal is one of the most widely recognized leaders in the employee benefits and human resource industry. Before becoming CEO of Triton Benefits and HR Solutions, Rosenthal was the CEO and pioneer of CheckPoint HR. Rosenthal previously served as Chairman of EPIX of what became under his leadership, one of the largest human resources outsourcing companies in the country. Steve began his career at Automatic Data Processing as an intern and later became a District Manager. Steve graduated from Fairleigh Dickenson University and earned a Bachelor of Science Degree in Management.