J.P. Farley News and Blog

Last year saw significant growth in consumer investment in Health Savings Accounts. According to a new Employee Benefit Research Institute report, the number of Health Savings Accounts rose from 5.4 million in 2010 to 8.4 million in 2011, a significant jump. Interest in health savings accounts and qualified high deductible health plans have been growing steadily but slowly since their debut in 2003. In 2006, 1.3 million Americans were invested in health savings accounts. Escalating health care costs have generated increased interest in more effective methods of managing healthcare dollars, spurring rapid growth in health savings accounts in the past few years.

Employers are becoming more aware of the benefits that consumer directed healthcare offers both them and their employees. While traditional private health insurance plans still dominate the market, a greater number of large and midsize employers have been exploring self-funded health plan options as a smart way to reduce and better manage company healthcare costs.

You can be a smarter health care consumer by making regular use of Online Health Tools available on the J.P. Farley website. Logging in allows plan members instant access to personalized healthcare options, benefit information and health tools provided by their employer’s self-funded health plan or Flexible Spending Account or Health Savings Account. On our website, plan participants will find many tools designed to provide the information they need to make informed choices about how they spend their healthcare dollars.

A health savings account, or HSA, could be thought of as a rainy day fund for medical expenses. That may be an overly simplistic definition, but it’s an easy and fairly accurate way to explain what is actually a complex insurance and tax vehicle. Implemented in 2003, health savings accounts are tax-exempt trusts that operate on the same principal as a savings account. They are generally funded by contributions from an employee or employer (or both), but can be funded by anyone. The money put into a health savings account can be withdrawn at a later date to reimburse qualifying medical expenses.

Consumer-directed healthcare plans can significantly lower the cost of self-funded health insurance, benefitting both employees and employers. Consumer-directed health care provides an opportunity employees to take control of their personal health care and that of their family. In traditional health insurance plans, the consumer is usually a passive participant. In consumer-directed healthcare programs, consumers move from being passive to active participants in their personal healthcare decisions.

The 2011 Society for Human Resource Management (SHRM) Health Care Benchmarking Survey examined health care costs for U.S. employees and found that costs vary widely, depending on the industry. One way to try to streamline health care costs is to opt for a self-funded health plan.

One of the good things about consumer directed health care is that it changes the way people think about medical care and about their health in general. With a traditional health plan, some consumers do not take the opportunity to be involved in making health care decisions and they have little understanding with regard to just how much medical care costs. They may have an idea that certain procedures are expensive or that some prescription drugs cost more than others, but their awareness is not at the level it could be.

Employees who are reluctant to take part in consumer directed healthcare and use Health Savings Accounts (HSAs) sometimes change their minds after they see how it works. If you are thinking about launching a consumer directed healthcare plan for your employees, you can get expert assistance from third-party administrator J.P. Farley to help make the transition smoother.

At the beginning of a new year, people make resolutions and set goals for what they want to accomplish over the next twelve months. This is great time to remind your employees that they can make a plan for making the most of their flexible spending account (FSA) dollars.

For companies that provide self-funded health plans, the start of the New Year provides a golden opportunity to promote employee wellness programs and encourage employees to take greater personal responsibility for their health. With their New Year’s resolutions fresh in their minds, employees will be coming to work this month highly motivated to drop those extra pounds, improve their eating habits, increase daily exercise or quit smoking.