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Sponsored by: Harvard Pilgrim Health Care
November 10, 2021

HSAs: A Benefit for Your Employees and Your Bottom Line

Health literacy is a costly issue across the country. Research shows that when employees don’t understand their options, they often end up overpaying for their health insurance—sometimes more than $1,000 annually. So how can employers help the situation?

One way to help employees manage and save for health care related expenses is through a health savings account (HSA). An HSA is a helpful, cost-effective financial tool for those with qualifying high-deductible health insurance plans to cover out-of-pocket costs. Contributions to these accounts aren’t subject to federal income tax, which is a significant value to employees, yet one-third of employees never open an account. 

With open enrollment quickly approaching, companies have an opportunity to help employees better understand how high-deductible plans with HSAs work, and the potential benefits behind HSAs. Here’s what you can do to make a difference.

 

Explain HSAs in simple, straightforward language.

Start with a high-level definition of an HSA without any jargon or complicated terms. Be sure to clear up common misconceptions about HSAs with these quick facts:

1. An HSA is different from a flexible savings account, yet a recent survey found that 65% didn’t know the difference. 

2. You don’t lose your HSA, even if you change health plans or jobs, or retire.

3. Your HSA funds roll over to the next year, so you don’t have to worry about using your funds before the year ends. 

4. HSAs provide three different tax advantages: contributions are pre-tax, these contributions can be used tax-free for qualified expenses and HSA funds and investments accrue interest tax-free. 

Employers aren’t expected to be HSA experts, so when in doubt, direct employees to educational resources where they can find the information they need on the ins and outs of how these programs work. One example is Bend, a partner of Harvard Pilgrim Health Care and Tufts Health Plan. As an HSA platform and engagement tool, Bend helps individuals and employers maximize their health savings benefits. 

 

Show how much employees can save by using their HSA. 

It can be challenging for employees to visualize their potential savings further down the road. To help, find ways—like through real-world examples and explaining the math—to show employees exactly how much money they could save on taxes by investing in an HSA. 

When considering a health plan with or without an HSA, tools like MyHealthMath, a decision support service offered by Harvard Pilgrim, can help employees calculate their savings and find an ideal plan for their individual situation. In fact, MyHealthMath led to an 80% increase in HSA contributions by participating members in 2019. The service can also help employees estimate their health costs for the year ahead, especially if they anticipate health-related travel expenses, family planning or other upcoming services. 

 

Offer (and bolster) your employer-sponsored HSA program.

A major obstacle to HSA adoption is lack of support from employers, leading employees to reluctantly find their own HSA providers. Surveys show that 83% of employers make contributions to HSAs, and doing so can be a powerful recruitment and retention tool. Not only are you helping employees save money and maintain better control of their health care costs, but you can help your bottom line too with FICA tax savings from these pre-tax contributions. 

You might also consider raising your contributions to your employees’ accounts to help maximize their savings and make opening an HSA more enticing. Measures like this can make your company more appealing to new talent. 

 

Communicate HSA perks often, all year round.

HSA education isn’t just important during open enrollment. In order to ensure your new and existing employees are aware of HSA advantages, consider a variety of communication tactics to get the message out there. Use printed materials such as flyers and signage, as well as digital materials that are accessible remotely, like videos, emails and downloadable PDFs.

Additionally, consider offering a guided information session by a professional during work hours and encourage employee attendance. Determine which methods your workforce engages with best and reach out multiple times a year. Encourage leadership to check in with the employees they oversee to ensure everyone at every level understands their health benefits. 

With a good communication and education strategy, you can help improve health literacy around HSAs within your organization, as well as boost the benefits you’re offering—a proven approach to attract and retain talent. It’s important to note that high-deductible health plans are a requirement for HSAs, and that type of plan might not be best for certain employees with significant health care expenses. However, for those who would benefit from an HSA, it’s time to get the word out and keep it going all year long. Start showing your employees how they can save. For more information on how Harvard Pilgrim can support your company through partnerships like MyHealthMath, talk to your Harvard Pilgrim Sales Executive or visit our website.