Prepare to help customers who have Health Savings Accounts
- President-elect Donald Trump and Republican members of Congress support expanding Health Savings Accounts (HSAs).
- Customers can use HSAs to pay for prescription drugs and many other items sold in pharmacies.
- Because customers who switch to a high-deductible health plan may cut their prescription spending, it is important to remind them about the importance of their medications and help them understand how to use their healthcare dollars efficiently.
More HSAs are likely
More than 20 million Americans are already enrolled in high-deductible health plans that permit Health Savings Accounts (HSAs), and these types of plans are likely to grow in use.1 President-elect Trump has voiced support for expanding HSAs and House Republicans have called for supporting an expanded HSA-type benefit.2
Also, more employers are moving to high-deductible plans, with estimates that within three years nearly 40% will make high-deductible plans the only option available for their workers.3
Proponents of high-deductible plans coupled with HSAs enjoy the tax savings that they offer. In 2017, the IRS will allow individuals with an HSA to contribute up to $3,400 in pre-tax money, and families can put up to $6,750 into an HSA pre-tax. These funds can be withdrawn tax-free for qualified medical expenses.4 Most states also allow HSAs to earn interest tax-free.
A risk of high-deductible plans
Research has shown that a risk associated with high-deductible plans and HSAs is that people may avoid important treatments to minimize their out-of-pocket spending. This includes reducing their spending on prescription drugs and services when switching to a high-deductible plan with an HSA.5
Possible avoidance of important drugs and preventive services makes it even more important to educate patients about the long-term value of such services and the repercussions of skipping out on their health regimen. That is, the benefits of getting a refill, taking medications as prescribed and getting an immunization can far exceed the out-of-pocket costs.
Help customers make good decisions
If you’re offering medication synchronization, you’re probably already talking with customers about the importance of taking their prescriptions as prescribed.
Here are three more ways to help customers navigate their use of HSAs:
- Understand what is covered. IRS Pub. 502 lists what types of expenses qualify for payment using an HSA. These include prescription drugs as well as many over-the-counter and other items you may sell in your pharmacy.
Bandages, breast pumps and supplies, support bars or grab bars for a disabled person, and diagnostic devices, including glucose and pregnancy test kits, are included. Even contact lens solution and enzyme cleaner are covered if the contact lenses are needed for medical reasons. Over-the-counter items including aspirin, allergy medications and antacids may be also covered.
However, some items require a closer look. For example, some weight loss treatments are covered, while others may not be. Be as knowledgeable and helpful as you can, but remind customers to consult an HSA expert with any questions.
- Educate customers. Consider hosting an education session for customers with an insurance expert who can explain which costs are eligible for HSA spending. Customers may be surprised at how many items they can buy at your pharmacy with those HSA funds.
Make shopping even easier by flagging HSA-eligible items on the shelf, such as with a colored sticker on the price sign or lists throughout your store. An additional option to considering is providing a reference sheet listing with HSA-eligible items available in your pharmacy as an insert at check-out.
- Check available data. You may already have information available within your pharmacy systems that can help customers. For example, you may be able to flag HSA-eligible items on receipts or offer customers a summary of their expenses for the past year so they can plan their HSA contributions for the coming year.
While HSA balances can carry over from year to year, customers with a Flexible Spending Account (FSA) for healthcare may have to “use it or lose it” by the end of the year. For those customers, a timely reminder can help them spend their money wisely and on a timely basis, instead of forfeiting a balance at year’s end.
Knowing exactly how your customers are paying for their healthcare expenses allows you to help them make the most cost-effective use of those dollars.
1 “Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2015: Estimates from the EBRI HSA Database,” Employee Benefits Research Institute, November 2016. LINK
2 “Could HSAs Be Part of the ACA Fix?” Susan Rupe, InsuranceNewsNet, Nov. 16, 2016. LINK
3 “How to Survive a High-Deductible Health Plan,” Donna Rosato, Consumer Reports, Nov. 17, 2016. LINK
4 “A Massage? Health Savings Accounts May Cover More Than You Think,” Lisa Kiplinger, USA Today, Nov. 17, 2016. LINK
5 “The Impact of an HSA-Eligible Health Plan on Health Care Services Use and Spending by Worker Income,” Paul Fronstin, Ph.D., and M. Christopher Roebuck, Ph.D., Employee Benefit Research Institute Issue Brief No. 425, August 2016. LINK