Savvy brokers understand that health savings accounts can not only offer clients substantial savings on health insurance premiums, but also triple tax advantages and help clients save for health care and other expenses in retirement. The key is to educate your clients to think in this way.

Over the years, more and more brokers have come to believe that HSAs are a very appealing benefits option. Many brokers, especially in the early years, had difficulty talking with their clients about HSAs because the concept was so new and different. This made them hesitant to introduce HSAs as a solution; yet, once brokers were able to demonstrate to their clients the savings, flexibility, and control that HSAs bring, they quickly became advocates.

Since HSAs were introduced on a widespread basis in 2004, plan enrollment has continued to expand steadily. According to America’s Health Insurance Plans, as of Jan. 1, 2010, more than 10 million Americans had HSA/high-deductible health plan coverage. Moreover, a recent National Business Group on Health survey of large companies found that 61 percent of employers are offering consumer-directed health plans in 2011, and 20 percent expect to make the consumer-directed health plan the only choice offered to their employees.

Driving factors

The growth this year is particularly impressive when you consider that it has taken place in a highly uncertain environment. Prior to the passage of health care reform legislation, there were questions about new limitations that might be imposed on HSAs, and even whether the products would continue to exist at all. Now we know that the near-term effect of the new health care reform law will be limited to two areas where HSAs are specifically concerned — an increased penalty for non-medical withdrawals for consumers under age 65, and the exclusion of coverage for over-the-counter medications purchased without a prescription.

To be sure, some of the growth in HSA plans stems from the fact that more employers are offering them as an option to help them control the costs of providing health care benefits. But brokers who sell individual coverage are also doing their part to show their clients that HSAs can be the right solution for them and can help their families control their health care spending.

Making it work

So, how do the brokers who have had a great deal of success educate clients whose coverage experience previously consisted of traditional health plans?

“It’s just talking with people — getting them to understand that once you meet the deductible, everything else is covered,” said Anthony Nefouse, vice president of Indianapolis, IN-based Nefouse & Associates. “A family can budget for the worst-case scenario, put the money aside, and if they don’t use it, they can carry it over year after year.”

According to Nefouse, today’s consumer is gaining greater access to health care information over the Internet — and that can only be beneficial for HSA clients as they set their budgets and shop around for their health care.

“As more programs and resources become available, people will better educate themselves on the cost of care,” he said. “Eventually, consumers with HSAs will know and can compare the cost of a procedure before they are treated.”

William Steffen of Steffen Financial Inc., based in Peoria, AZ and also licensed in Florida, explains to his clients that HSAs are a form of “pure” insurance.

“All clients start out expecting everything to be covered in a health plan, no matter what type,” Steffen said. “Then, the questions are: Do they want to reduce their health care costs and are they really looking for protection for the major, catastrophic risks?”

Steffen adds that the education process doesn’t end with the sale, and that “you need to keep in contact with your clients to make certain they understand how the HSA works, especially in the beginning.”

Nefouse said about 90 percent of his sales come from HSAs, and Steffen estimates that 85 percent of his clients have purchased HSA plans. Steffen and Nefouse both use their respective websites as tools to help educate clients and prospects about HSAs.

With millions of Americans looking to save on their health insurance premiums, control health care spending, and reduce taxes, educating consumers about the value of HSAs is a win for the broker and the client.

“In the end,” Steffen said, “my HSA clients become better consumers, they ask more questions about what is absolutely necessary, and are better able to do what’s in their best interests.” 

Susan Fowler is vice president of sales for Golden Rule Insurance Company.