The plans’ offer of paying-less-now/possibly-pay-more-later is most attractive to millennials, those workers who were born between 1980 and 1998, and decreasingly attractive as workers get older, according to the Benefitsfocus report.
The report found that 44 percent of millennials working at the large firms analyzed opted for a high-deductible health plan when given the choice.
That compares to just 22 percent of workers who were born in 1948 or before, a group defined as “Traditionalists” by the report.
“This could simply be the result of familiarity (HDHP’s are less of a novelty for millennials, while Traditionalists might be more reluctant to change), or that of income (millennials presumably earn less than older generations and therefore choose to spend less on premiums),” the report said.
Although millennials were the biggest fans of high-deductible plans, they also were the least avid participants in health-savings accounts, which the plans are paired with.
HSAs are tax-advantaged tools designed to help participants save and invest money that they may need later for out-of-pocket costs. HSAs allow participants to contribute pretaxed pay to the account; allow them to invest that money without the capital gains being taxed; and also allow them to withdraw money from the account without paying taxes as long as they use the funds for qualified medical expenses.
Benefitsfocus’ report found that between individual and family accounts, participants in high-deductible plans analyzed contributed only just about 42 percent of the maximum amounts allowed for HSAs in 2016. The maximums are $3,350 for a self-only high-deductible plan, and $6,750 for a family plan, with workers 55 and older allowed to kick in an extra $1,000 against both limits.
The average single, 25-year-old worker analyzed by the report contributed just 22 percent of his maximum allowed HSA contribution.
Millennials think themselves “to be indestructible,” which could lead them to put less in HSA’s than their older colleagues, Oldham said.
He also noted that many millennials enter the workforce with significant amounts of student loan debt, which can limit their ability or inclination to contribute to HSAs.