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Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2014

April 10, 2015 Comments off

Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2014 (PDF)
Source: Employee Benefit Research Institute

Executive Summary

  • In 2014, there was $22.1 billion in health savings accounts (HSAs) and health reimbursement arrangements (HRAs), spread across 10.6 million accounts, according to data from the 2014 EBRI/Greenwald & Associates Consumer Engagement in Health Care Survey (CEHCS). In 2008, there were only 4.2 million accounts with $5.7 billion in assets.
  • The average account balance was $2,077 in 2014, up from $1,356 in 2008.
  • An increasing number of individuals have held their account for three or more years. One-quarter (27 percent) had held their account for three to four years, up from 19 percent in 2008. Thirteen percent had held their account five or more years, up from 4 percent in 2008.
  • Accounts with an employer contribution had a higher average balance than those without an employer contribution. Accounts with an employer contribution had an average balance of $2,403, whereas those without an employer contribution had an average balance of $2,056.
  • Individuals who had held an HRA or HSA for five years or more had $3,092 in their account. Those who had held an account for less than a year had less than $1,500 in their account. In general, average account balances have grown over the longer term regardless of how long the account had been open.
  • Average rollover amounts increased from $1,165 in 2013 to $1,244 in 2014.
    $8.9 billion was rolled over in 2014, down from $9.4 billion in 2013.
  • Eleven percent of individuals had held an account for more than a year without a rollover in 2014.
  • Rollover amounts increased with the length of time an individual had held an account. In 2014, those who had held an account one to two years rolled over an average of $982; those who had held an account three to four years rolled over an average of $1,421; and those who had held an account five or more years rolled over an average of $1,428.
  • Accounts with an employer contribution had a higher amount rolled over than those without an employer contribution. Accounts with an employer contribution had an average rollover of $1,280, whereas those without an employer contribution had an average rollover of $1,069.

Utilization Patterns and Out-of-Pocket Expenses for Different Health Care Services Among American Retirees

April 2, 2015 Comments off

Utilization Patterns and Out-of-Pocket Expenses for Different Health Care Services Among American Retirees
Source: Employee Benefit Research Institute

Executive Summary

  • This study separates the more predictable health care expenses in retirement for older Americans (ages 65 and above) from the less predictable ones. Based on utilization patterns and expenses, doctor visits, dentist visits and usage of prescription drugs are categorized as recurring health care services. Overnight hospital stays, overnight nursing-home stays, outpatient surgery, home health care and usage of special facilities are categorized as non-recurring health care services.
  • The data show that recurring health care costs remain stable throughout retirement. The average annual expenditure for recurring health care expenses among the Medicare-eligible population was $1,885. Assuming a 2 percent rate of inflation and 3 percent rate of return, a person with a life expectancy of 90 would require $40,798 at age 65 to fund his or her recurring health care expenses. This does not include recurring expenses like insurance premiums or over-the-counter medications.
  • Usage and expenses of non-recurring health care services go up with age. Nursing-home stays in particular can be very expensive. For people ages 85 and above, the average and the 90th percentile of nursing-home expenses were $24,185 and $66,600 during a two year period, respectively.
  • Nursing-home stays, home health care usage, and overnight hospital stays are much higher in the period preceding death. More than 50 percent in every age group above age 65 received in-home health care from a medically trained person before death. For those ages 85 and above, 62.3 percent had overnight nursing-home stays before death and 51.6 percent were living in a nursing home prior to death.
    Some recurring and non-recurring expenses were also much higher before death.
  • Usage of recurring health care services generally go up with income and usage of non-recurring health care services—except outpatient surgery and special facilities—goes down with income.
  • The top income quartile spent significantly more on nursing-home and home health care expenses than the rest. This could be a result of Medicaid coverage for the lower-income, lower-asset groups.
  • Women above 85 have significantly higher nursing-home usage than men. The rest of the differences between men and women are small.

Retirement Savings Shortfalls: Evidence from EBRI’s Retirement Security Projection Model®

February 20, 2015 Comments off

Retirement Savings Shortfalls: Evidence from EBRI’s Retirement Security Projection Model®
Source: Employee Benefit Research Institute

Executive Summary

• EBRI previously published extensive analysis that focused on the EBRI Retirement Readiness RatingsTM —the probability that households will not run short of money in retirement. This Issue Brief expands the earlier analysis by providing similar analysis of the EBRI Retirement Savings Shortfalls (RSS)—the size of the deficits that households are simulated to generate in retirement

• The Retirement Savings Shortfalls show that for those on the verge of retirement (Early Baby Boomers), the deficits vary from $19,304 (per individual) for married households, increasing to $33,778 for single males and $62,734 for single females.

• While these RSS values may appear to be relatively small considering they represent the sum of present values that may include decades of deficits, it is important to remember that less than half of the simulated lifepaths modeled are considered to be “at risk.” Looking only at those situations where shortfalls are projected shows that the values for Early Boomers vary from $71,299 (per individual) for married households, increasing to $93,576 for single males and $104,821 for single females.

Views on the Value of Voluntary Workplace Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey and The Gap Between Expected and Actual Retirement: Evidence From Longitudinal Data (EBRI Notes, November 2014)

November 20, 2014 Comments off

Views on the Value of Voluntary Workplace Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey and The Gap Between Expected and Actual Retirement: Evidence From Longitudinal Data (EBRI Notes, November 2014)
Source: Employee Benefit Research Institute

Executive Summary

Views on the Value of Voluntary Workplace Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey

  • Three-quarters of workers state that the benefits package an employer offers prospective workers is extremely (32 percent) or very (44 percent) important in their decision to accept or reject a job.
  • Nevertheless, 34 percent are only somewhat satisfied with the benefits offered by their current employer, and 22 percent are not satisfied.
  • Eighty-six percent of workers report that employment-based health insurance is extremely or very important, far more than for any other work place benefit.
  • Workers identify lower cost (compared with purchasing benefits on their own) and choice as strong advantages of voluntary benefits. However, they are split with respect to their comfort in having their employer choose their benefits provider, and think the possibility that they may have to pay the full cost of any voluntary benefits is a strong or moderate disadvantage.

The Gap Between Expected and Actual Retirement: Evidence From Longitudinal Data

  • The 2008 economic recession sharply increased the gap between expected and actual retirement. Pre-September 2008, before the investment markets crashed, 83.9 percent of workers retired either earlier or no later than three years after their expected retirement—compared with only 59.3 percent who did so post-September 2008.
  • Longitudinal findings (comparing same cohort at different points in time) show that more people (35.9 percent) actually retired after 65 than expected (18.9 percent), and among those who expected to retire after 65, more than half (56.6 percent) did so. It also shows that 38.0 percent retired before they planned, 48.0 percent retired after they planned, and 14.0 percent retired the year they planned.
  • Longitudinal data also show that people who have a retirement plan tend to retire closer to when they planned, compared with those without a plan. It also found that the gap between expected and actual retirement is generally very small between those with defined benefit plans and defined contribution plans.

Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2013

November 10, 2014 Comments off

Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2013
Source: Employee Benefit Research Institute

Executive Summary

  • The percentage of workers participating in an employment-based retirement plan rose in 2013, increasing for the first time since 2010 among all workers and private-sector workers.
  • The retirement plan participation level depends on the type of worker being considered: Among all American workers in 2013, 51.3 percent worked for an employer or union that sponsored a retirement plan (the sponsorship rate), while 40.8 percent participated in a plan.
  • Among wage and salary workers ages 21–64, the sponsorship rate increased to 56.0 percent, and the portion participating increased to 45.8 percent.
  • Among full-time, full-year wage and salary workers ages 21–64, the sponsorship rate was 62.3 percent and 54.5 percent of the workers participated in a retirement plan.
  • Almost 74 percent of wage and salary public-sector workers participated in an employment-based retirement plan.

Quality of Health Care After Adopting a Full-Replacement, High-Deductible Health Plan With a Health Savings Account: A Five-Year Study

September 18, 2014 Comments off

Quality of Health Care After Adopting a Full-Replacement, High-Deductible Health Plan With a Health Savings Account: A Five-Year Study
Source: Employee Benefit Research Institute

Executive Summary

  • This study reports use of health care services related to health care quality over five years among over 18,000 individuals from a single large employer in the Midwestern United States that adopted an HSA-eligible health plan for all employees. It represents one of the longest observation periods reported with a full-replacement CDHP, and it is one of the few studies with a matched control group.
  • The introduction of the HSA-eligible health plan had a negative impact on office visits for annual physicals, well-child visits, and preventive visits in the year that the plan was adopted. In the second year, office visits increased for HSA-eligible health plan enrollees, but were mostly unchanged for the comparison group. By the fourth year in the HSA-eligible health plan, office visits for annual physicals, well-child visits, and preventive visits were down slightly relative to the comparison group.
  • Rates of LDL testing for adults with cardiovascular disease were reduced only in the first year of the HSA-eligible health plan. However, the introduction of the HSA-eligible health plan had a negative effect on medication monitoring for adults on select maintenance drugs not only in the first year that the new health plan was introduced, but in the following three years as well. • The HSA-eligible health plan reduced avoidance of both antibiotics for adults with acute bronchitis and imaging services for adults diagnosed with low back pain. Both services are often considered unnecessary.
  • Adoption of the HSA-eligible health plan was associated with a reduction in breast cancer, cervical cancer, and colorectal cancer screening in year one, although screenings for breast cancer and cervical cancer rebounded in year two. By year four, breast cancer screening was higher among enrollees in the HSA-eligible health plan than in the comparison group. In contrast, cervical cancer screening was lower among HSA-eligible health plan enrollees than the comparison group in year four. Throughout all of the study years, colorectal cancer screening was lower among HSA-eligible health plan enrollees than in the comparison group.
  • The HSA-eligible health plan was not associated with a change in the percentage of adults receiving HbA1c testing until the fourth year. LDL testing was lower as a result of the introduction of the HSA-eligible health plan in all years.

Individual Retirement Account Balances, Contributions, and Rollovers, 2012; With Longitudinal Results 2010–2012: The EBRI IRA Database

May 29, 2014 Comments off

Individual Retirement Account Balances, Contributions, and Rollovers, 2012; With Longitudinal Results 2010–2012: The EBRI IRA Database
Source: Employee Benefit Research Institute

Executive Summary

  • As part of the EBRI Center for Research on Retirement Income (EBRI CRI), the EBRI IRA Database is an ongoing project that collects data from IRA plan administrators across the nation. For year-end 2012, it contained information on 25.3 million accounts owned by 19.9 million unique individuals, with total assets of $2.09 trillion. The EBRI IRA Database is unique in its ability to track individual IRA owners with more than one account, thereby providing a more accurate measure of how much they have accumulated in IRAs.
  • The average IRA account balance in 2012 was $81,660, while the average IRA individual balance (all accounts from the same person combined) was $105,001. Overall, the cumulative IRA average balance was 29 percent larger than the unique account balance.
  • Rollovers overwhelmingly outweighed new contributions in dollar terms. While almost 2.4 million accounts received contributions, compared with the 1.3 million accounts that received rollovers in 2012, 10 times the amount of dollars were added to IRAs through rollovers than from contributions.
  • The average individual IRA balance increased with age for owners ages 25 or older, from $11,009 for those ages 25–29 to $192,961 for those ages 70 or older.
  • Looking at individuals who maintained an IRA account in the database over the three-year period in question, the overall average balance increased each year—from $95,431 in 2010 to $95,547 in 2011 and to $106,205 in 2012.
  • Males had higher individual average and median balances than females: $139,467 and $36,949 for males, respectively, vs., $81,700 and $25,969 for females. However, the likelihood of contributing to an IRA did not significantly differ by gender within the database, as both Roth and traditional IRAs owned by either males or females (as well as those without a gender identified in the database) had similar probabilities of receiving contributions.
  • IRA owners were more likely to be male. In particular, those with an IRA originally opened by a rollover, or a SEP/SIMPLE IRA were much more likely to be male (57.4 percent of the former, and 58.2 percent of the latter).
  • Younger Roth IRA owners were more likely to contribute to the Roth IRA than were older Roth IRA owners: 43 percent of Roth owners ages 25–29 contributed to their Roth in 2012, compared with 21 percent of Roth owners ages 60–64.
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