For years, the consensus of benefits consultants and employers has been that integration between health insurance and HSA providers was the paramount factor in selecting an HSA provider. Thus, many employers made the important choice of an HSA provider predominantly, or in some instances solely, on this one metric.
Certainly, the seamless communication between an HSA provider and a health insurance provider is a factor that an employer should give consideration and weigh when making their decision. The more simple and easy a transition to a HDHP/HSA model is made for the employee the more successful the transition is likely to be. But how heavily should integration be weighed by an employer, and is there actually a downside to coupling the HSA provider with a health insurance carrier?
First, what is integration? The most complete form of integration is a situation where the health insurance provider is coupled with a provider it owns. The advantage to the employer during the open enrollment period is that employees only have to complete one set of paperwork and one user interface. The post-enrollment advantage achieved from this level of integration is that claims are seamlessly synced between the health insurance and HSA providers. In addition, claims adjudication, which enables payments to be paid automatically from an employee’s HSA, is an available option.
But while integration has advantages, there are also potential disadvantages for an employer who is contracted with fully integrated health insurance and providers. First, an employer should consider whether it wants to offer claims adjudication as an option with its HSA program. An employee should consider—if financially possible—paying expenses out of pocket without utilizing his or her HSA funds to take full advantage of the triple tax-free opportunity available. Claims adjudication is a feature that can lead to employees to not making long-term, strategic choices concerning how they spend and invest their HSA dollars.
As health care is a major expenditure category, employers are likely to make changes to health care providers due to price increases or inadequate service. The integration of the HDHP and HSA providers makes such a change more complex. Therefore, employers should keep in mind that while integration is likely to make processes simpler and more streamlined in the short term, it might have the opposite effect in the future should the employer decide to change either provider.
As with most decisions concerning HDHP and HSAs, there is no one correct answer. This why our firm recommends that employers carefully research the pros and cons of integration before selecting an HSA provider.
Matt Clarkin is president of Access Point HSA. Access Point HSA is a Rhode Island-based consulting firm serving all stakeholders in the HDHP/HSA marketplace. He can be reached at matt.clarkin@accesspointhsa.com.
Matt Clarkin is president of Access Point HSA. Access Point HSA is a Rhode Island-based consulting firm serving all stakeholders in the HDHP/HSA marketplace. He can be reached at matt.clarkin@accesspointhsa.com.
