Helping Your Employees Establish a Contribution Cadence
We know contributing to HSAs can provide numerous benefits to employees.
The more your employees know about contributions, the better equipped they will be to take full advantage of their HSAs’ tax benefits. HSA contribution limits and tax reporting, if not understood by your employees, can lead to extra work for both of you – so it’s important to help them along the way!
Here are some ways you can help your employees increase their HSA knowledge and confidence:
Remind your employees to open their accounts and contribute to their HSA
As an employer, you have the option to contribute to your employees' HSA, and if you do, the HSA is automatically activated. However, if you don’t contribute or if there is a period of time before you contribute, the HSA won’t be active until a contribution is made. Encourage employees to contribute to their own account not only for the benefits of contributing, but to ensure their account is active. Many account holders wait until a bill is due to activate their account, but in that case there may not be much money in their account. Remind your employees of the benefits of setting up their account online and of contributing regularly.
Make sure your employees understand the annual limits
Remind your employees that all employer contributions count toward their annual limit (the HSA limits for 2019 are $3,500 for individuals, $7,000 for families, and members 55 and over can contribute an additional $1,000). That way, when they consider what to contribute on their own, they will have a better idea of how much they can contribute.
Promote consideration of your employees’ past medical expenses
Encourage your employees to look back at how they’ve spent their HSA dollars in previous years and to consider which expenses seem to happen year after year (i.e. prescriptions and annual appointments). Then, factor in what health care costs came up unexpectedly. That insight can help shape how employees choose to contribute to their HSA this year.
Encourage your employees to have an emergency fund
Remind your employees that until the health plan deductible is met, they are responsible for paying for any health care expenses that come their way. Using the funds in their HSA can help if a big bill comes their way, so it’s good to set aside some money for emergency situations.
Remind your employees to check on any unclaimed or unpaid medical expenses
As long as your employees have maintained good records of their expenses, they can use their HSA funds to pay for unclaimed medical expenses throughout the year. If qualified, those expenses can be reimbursed as long as they were not previously paid for or reimbursed from another source.
Providing active, ongoing communication to employees about their HSA can help them establish a healthy contribution cadence and feel confident they are making the most informed health care spending choices for themselves and their families.