Health Savings Accounts (HSAs) offer enormous benefits for employers and employees when used as part of a high-deductible health plan. Employers use HSAs to deliver high-quality care with more flexibility in their benefits budget. For employees, HSAs offer additional coverage over traditional plans. Although powerful, employees commonly struggle to use HSAs to their full potential. To make HSAs a meaningful part of your benefits package, educate employees about the plan’s nuances.
When used properly, HSAs deliver numerous advantages over traditional health care plans, including:
- Greater selection in health care providers. HSAs grant employees the opportunity to shop around for better care.
- Investment opportunities. Enrolled employees can invest pre-tax income into their HSA. If an employee requires few medical payments throughout the year, this money can grow over time and even contribute to future retirement payments.
- Additional coverage. An HSA can be used on care that traditional health plans may not cover on their own, including Dental and Vision.
Although HSAs have the potential to be advantageous, many employees hesitate to use them because they are more complicated than traditional health care plans. The savings and investment aspects scare some employees away and the removal of a low deductible means employees are responsible for paying many of their health care costs out of their own pocket. With a little extra training, however, employees can unlock the HSA’s full value.
Overcoming HSA Challenges
To overcome the intricacies of an HSA, an employer should guide employees through two different pieces of the puzzle:
- The terminology. For some, terms like “tax-deductible” are hard to understand, which makes the plan scary. HSAs should be broken down into simple explanations so that employees are comfortable with the vocabulary.
- The user experience. The HSA user experience is one of the toughest hurdles for folks transitioning into an HSA for the first time. Many employees suffer sticker shock when they see their first bill because they have not yet reached their deductible.
As the employer, you can simplify the terminology and optimize the user experience through proper outreach and education.
Before Implementing an HSA
Prepare your employees before launching an HSA at your company. Consider:
- Hosting small meetings to explain the plan. In our experience, the larger the group, the harder it is to make sure everyone understands the plan. We recommend keeping your meetings to 30 people or less.
- Posting flyers around the workplace. Use the flyers to announce your upcoming meetings, but also use them to explain some of the more complex components in bite-sized chunks. For example, “By setting aside money from each paycheck, your HSA ensures you have the financial resources ready for medical emergencies.”
The better you prepare, the more you can save your HR manager from a flood of questions once employees begin transitioning onto the plan.
After Launching an HSA
Once the HSA is in place, aim to stay ahead of employee questions. Consider:
- Distributing employee education pamphlets. Write the initial pamphlets to deliver a high overview of the plan, but use additional pamphlets to dive deeper into specific topics.
- Sending reminders. Use emails throughout the year to refresh employees on plan specifics and remind them to continue investing.
- Find additional support. One of our tools provides white-glove attention to your employees to remove some of the administrative strain from your HR team. Look for new ways to deliver personalized care without forcing team members to invest unnecessary time in plan administration.
HSAs are complex. If launched poorly, they can become a burden to HR and a health care nightmare for employees. When implemented correctly, however, HSAs have the potential to benefit everyone by providing lower prices, a wider range of services, and care customization.