A bout EBRI: The Employee Benefit Research Institute is a private, nonpartisan, and nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement, and economic security issues. EBRI does Key Findings From the Study: not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members and sponsors, which include a broad range of public and private organizations. For more information, visit • The impact on premiums of expanding pre-deductible coverage for 14 services in HSA-eligible health June 2, 2022, #437 www.ebri.org. plans as allowed in IRS Notice 2019-45 is small. Estimated premium increases range from virtually zero to 1.5 percent. A Thank You To Our Funders: This study was conducted through the EBRI Center for Research on Health • There is no expected premium increase when deductibles are replaced by coinsurance, use of health care Benefits Innovation (EBRI CRHBI), with the funding support of the following organizations: Aon, Blue Cross services is assumed not to increase due to lower cost sharing, and enrollees’ related diagnoses are Premium Increases Are Low When Employers Add Pre- Blue Shield Association, ICUBA, JP Morgan Chase, National Pharmaceutical Council, Pfizer, and PhRMA. required. Dedu • We fc ound a tible C 0.9 perovera cent increage f se in pror emiuPre ms when u vent se ofi he ve alth c Se are rvic services es in R was assume ed sp to ion ncreas see because of the lower cost sharing and when employers did not impose any cost sharing. 1 See https://www.irs.gov/pub/irs-drop/n-19-45.pdf. to Increased IRS Flexibility • If all 14 services were excluded from pre-deductible coverage with no cost sharing, there was increased use of health care services, and the services were covered whether or not an enrollee had a related IRS Notdi ice agno 2019 se-d 45 a cond llow ition, p s hearle th s mium avis wou ngs aclcou d inc ntr ea (Hse SA by )-el 1.5 igiper ble he cent al . th plans the flexibility to cover 14 m edications and services used to prevent the exacerbation of chronic conditions prior to meeting the plan ### deductible. Research from the Employee Benefit Research Institute (EBRI) reported on findings from a 2021 Figure 2 EBRI survey of employers that collected information on their response to the 2019 guidance. The survey found Impact of Expanding Pre-Deductible Coverage t hat many employers added pre-in dedu HSA ctibl -Eligibl e covere age a Health s a r ePlans sult of t on he I Pr Remiu S Notms* ice. Furthermore, among employers not offering pre-deductible coverage, nearly all either plan to add such coverage or are considering doing so. A Use Flat, No Other Cost Sharing Use Higher, No Other Cost Sharing more recent EBRI report found the impact on premiums of expanding pre-deductible coverage for 14 services in Use Flat, Average Coinsurance Use Higher, Average Coinsurance 1.6% HSA-eligible health plans as allowed in IRS Notice 2019-45 is low. 1.5% 1.4% IRS Notice 2019-45 1.2% The U.S. Department of Treasury issued guidance on July 17, 2019 via IRS Notice 2019-45 to further increase the flexibility of health savings account (HSA)-eligible health plans to cover specific low-cost 1.0% 1 1.0% preventive services to prevent the exacerbation of chronic conditions on a pre-deductible basis. 0.9% Figure 1 0.8% Chronic Disease Management Services in the Expanded Safe Harbor 0.6% 0.6% 0.6% Preventive Care Service For Individuals Diagnosed With Congestive heart failure, diabetes, and/or coronary Angiotensin Converting Enzyme (ACE) inhibitors 0.4% artery disease 0.3% Anti-resorptive therapy Osteoporosis and/or osteopenia 0.2% 0.2% Beta-blockers Congestive heart failure and/or coronary artery disease 0.03% Blood pressure monitor Hypertension 0.0% Inhaled corticosteroids Diagnosed Enrollees Asthma All Enrollees Insulin and other glucose lowering agents Diabetes Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. Retinopathy screening Diabetes * HSA = health savings account. Peak flow meter Asthma Glucometer Diabetes Hemoglobin A1c testing Diabetes Several factors explain the relatively small increases in premiums. The percentage of enrollees with any of the International Normalized Ratio (INR) testing Liver disease and/or bleeding disorders diagnoses mentioned in the IRS notice is low. As a result, use of the 14 services allowed to be covered pre- Low-density Lipoprotein (LDL) testing Heart disease deductible is also relatively low, especially among enrollees with a related diagnosis. The cost for nearly all the Selective Serotonin Reuptake Inhibitors (SSRIs) Depression 14 services allowed to be covered pre-deductible is relatively low when spread across the entire population. Users Statins Heart disease and/or diabetes of the 14 health care services are commonly high users of health care more generally because of their health Source: https://vbidcenter.org/initiatives/hsa-high-deductible-health-plans-2/ conditions and often meet their deductible. As a result, even when coverage for services is provided pre- deductible, these users are likely to continue to meet their deductible. Employers could easily recoup the forgone With IRS Notice 2019-45 in place, all HSA-eligible health plans are now able to adopt a more flexible cost sharing by imposing a pre-deductible copayment or coinsurance. benefit design offering more protection for certain medical services through a value-based insurance design (V-BID) plan structure. 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