School Uses HSAs to Fight Health Care Costs

By Chris Silva
Employee Benefits News

Like so many other businesses in the nation, the Park Tudor School in Indianapolis was bleeding money due to health care costs that have been spiraling upward during the past few years. When HR Director Amy Hartman was tasked with lowering the costs, she told upper management that they needed to embrace a health savings account.

She said the private school system had better get used to HSAs before they became absolutely necessary one day. Hartman set up an HSA, taking courses to become a registered broker and negotiating with HMOs.

Speaking at the Benefits Management Forum & Expo in Dallas yesterday, Hartman said Park Tudor is seeing continued cost savings after adopting an HSA in 2006. “We saw a 25% to 30% reduction in premiums if [workers] elected an HSA, rather than a PPO,” Hartman explained.

Park Tudor’s strategy is simple – keep people healthy, identify problems early and manage chronic conditions to optimize quality of life. To help its 250 employees warm to the HSA, Park Tudor contributes $150 per month on a $1,500 deductible for families and $60 per month on a $500 deductible for singles.

Eleven employees initially adopted the HSA, and that number is now up to 17. Hartman believes employees with consumer-driven health plans are getting savvier when it comes to choosing which medical services to buy. “There are people here asking more questions during the benefits renewal period than in the past,” she observed.

Employers may have to consider offering a CDHP one day, whether they like it or not. “I fear it might not be a choice [someday],” Hartman said. “We are helping our employees understand this, in case it becomes their only choice. If we don’t offer it now, we might not have a choice later.”

Editor's Note: I believe this article has some misstatements relative to the plan deductibles. An HSA-compatible health plan, by law, must have a minimum $1,100 single deductible and $2,200 family deductible. The article above mentions a $500 single deductible and a $1,500 family deductible.