As employer-offered high deductible health plans (HDHPs) continue to become more widely offered and additional health care premium costs are being shifted to members, there seems to be a perception among employees that you can no longer have a quality health care plan that is also affordable.
Employees perceive that you need to compromise one for the other. Due to the shift in health care plans offered and confusion about the HDHP complement, Health Savings Accounts (HSAs), as a new benefit, employees continue to be confused about the value of HSAs and how to effectively use them. These 5 tips will help benefits managers address employee concern and can help increase HSA adoption.
1. Reposition HSAs as Health Care Cost Reducers
While HSAs have historically been positioned as a long-term savings tool, the reality is that many Americans are HSA spenders. HSA spenders are people who use their accounts to pay for health care expenses as they occur – because they must. Whether because of a chronic illness, medical costs associated with children, or limited income, there’s a reason employees with HSAs aren’t using the saving option.
By repositioning an HSA as a benefit that can save pre-tax dollars to pay for today’s medical costs, employees’ value perception of HSAs will shift. Last year, The Employee Benefit Research Institute (EBRI) published a report that stated 66% of HSA account holders withdrew funds in 2017. While the average amount contributed was $2,843, the average annual amount withdrawn was $1,725.
2. Focus on Education
Triple Tax Benefit. HDHP. HSA. Even your savviest HSA holders are likely to need resources and support as they navigate their HDHP. Providing tools and resources for employees will empower them to take charge of their health care journey. These tools can help employees navigate the health care space and become empowered to be active users of their HSA:
- HSA Fact Sheets are an easy-to-reference guide to help employees understand what the triple tax benefit is, the benefits of an HSA and what expenses can be paid for through this benefit.
- HSA Contribution Calculator determines the amount that employees can contribute for the current tax year.
- Strategies for Contributing to an HSA will guide employees on taking the steps to set up contributions and fully leverage this benefit.
3. Contribute to Employees’ HSA accounts
The health care space has become more and more confusing for employees, not to mention more expensive. HSAs provide employees a safety net against medical expenses prior to meeting the deductible, reduce the likelihood of employees delaying necessary care due to cost, and improve the overall perception of benefits offered to employees.
Likewise, by encouraging employees to contribute to their HSA, employers can lower their taxable payroll. Even if an employee can’t proactively contribute to their HSA, they can still save on taxes by first depositing the out-of-pocket cost for a medical bill into their HSA when they are ready to pay the bill, then paying the provider directly from the HSA.
TIP: Set up HSA accounts to open automatically for employees to ensure day-one readiness.
4. Change The Communication Style
In a recent survey we performed, 31% of employer respondents cited “employee level of personal health care knowledge and education” as the number one challenge when offering health spending or savings accounts. Our takeaway? Many account holders can get more tax advantages from their HSA than they currently do.
With all of the nuances of health care, communicating benefits isn’t as simple as plopping a thick reference guide on employees’ desks and calling it a day. To really make an impact, benefits managers should focus on accommodating multiple learning types by offering different formats of information. Examples? News articles, charts, graphs, videos and lunch and learns. By providing information throughout the year and making them searchable, easy-to-skim and to-the-point, employee engagement and response to materials will increase, as will their understanding of their benefits.
5. Empowering Employees
Employees have options when it comes to their health care providers and services and this reminder can have a huge impact on health care costs. Equip employees with resources on how to lead conversations with their doctors so that when their physician recommends a new medical treatment, they are comfortable asking whether the treatment is necessary, if there are alternative options and the cost of the proposed treatment. As employees begin to lead these conversations, they can avoid unnecessary health care expenses and better prepare for future health care expenses by leveraging their HSAs.
Tools to compare services at local medical facilities, like the Pick Your Price tool, guide employees to the right care for them, with the best price option. Similarly, many health care providers also have resources to compare services, giving employees peace of mind that they are not sacrificing quality for a lower price.
By empowering employees with ongoing education, tools, and resources, they can begin to better understand how to leverage their HSAs and ways to maximize the benefit for their need. By implementing these five tips, benefits managers will begin to change the way that employees view HSAs and increase adoption. For more on increasing HSA adoption, read our article by Matt Marek, president and CEO of Further, featured in BenefitsPRO.