HEALTH/BENEFITS
3 Ways To Make HSAs The Choice For Employees Workers may be confused about health savings accounts or may fear a large, unexpected expense. Here are ways employers and brokers can educate them. By Amy O’Meara Chambers
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hy aren’t more employees selecting health savings accounts? Many human resource teams work diligently with their benefit brokers to offer a thoughtfully crafted HSA with at least one of their health plan options, only to be disappointed in the final enrollment numbers. They are left scratching their heads when faced with lower-than-expected employee selection. When the HSA should be the clear winner compared to the traditional, more expensive health plan options, what more can an employer do to help employees shift to an HSA? Most employers design an HSA offering in which the combination of an employee’s premium contribution for the high-deductible health plan plus any employer contributions to the HSA creates an offering for employees that is more attractive than the employer’s next best health plan choice. A lower employee contribution for the HDHP premium will immediately grab the attention of most employees, and then most will calculate whether the annual savings in premium will cover the HDHP’s deductible exposure for the year. It is essential to consider your employee demographic as you create your financial package for the HSA, considering average family income as well as their financial and health care literacy. A “lower” employee contribution to premium should be relatively lower than other employee premiums associated with plans you offer and should consider this employee demographic. If the 12 months of premium savings do not outweigh the higher-deductible 40
liability and the HSA tax savings do not convince a worker to choose the HDHP with an HSA, an employer HSA contribution could help sway hesitant employees. Although the intent is not to have the combination of the lower worker premium and the employer contribution fully pay for all out-of-pocket costs for the worker, the HSA’s overall financial
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Make the account-opening and contribution processes easy. Sometimes workers shy away from their employer’s HSA option because they are confused or don’t want to spend much effort opening an account. “Too much work,” they will argue. The good news is that the HSA industry has come a long way to make opening
HSA Assets Approach $100 Billion Through First Half Of 2021
SOURCE: Devinir Research
In the first half of 2021: • Total HSA assets reached $92.9 billion, a 26% increase year over year. • HSA dollars that are invested soared to $30.4 billion, up 73% year over year. • There are now over 31 million HSAs, a 6% increase year over year. • Almost $24 billion was contributed to HSAs.
package must look better than the employer’s next best plan offering and give the employee a reason to give the HSA a closer look. Assuming worker contributions to the HSA premium are lower compared to your other health plan offerings and you’re already incenting workers with an employer HSA contribution, here are three additional ways to help nudge workers into a health plan that features an HSA.
InsuranceNewsNet Magazine » December 2021
accounts easy, and the IRS allows employerplan sponsors to help streamline the account-opening and contribution processes without triggering regulatory issues. Employers can choose a single HSA provider for their workers. This comes with certain advantages: Employers can pay any HSA-related fees for workers. Employers also can establish cafeteria plans for workers to contribute to their HSA via payroll deduction (which allows
