As health savings accounts continue to grow in popularity, it’s becoming evident that not all HSA plan designs are created equal. While plan design changes can seem cumbersome, our experience tells us that a well-designed plan helps drive higher enrollment and higher savings for the employer and employee.
This is all done while improving employee health and well-being through educating and engaging employees on how to be smarter health care consumers. A well-designed plan helps lower the barriers to enrollment while maximizing the potential savings of an HSA.
We’ve created a checklist below to see if your employers’ plans are making the grade.
1.) Contribute to employee accounts. An employers’ contribution to employees’ accounts is the single most effective way to get employees to save. The amount should be significant enough to grab attention. We recommend contributing earlier in the year to help overcome the fear of an unexpected health care expense early in the year.
2.) Price high-deductible plan competitively. In general we recommend that the plan be priced very competitively — if not the lowest monthly premium option. Consider this — if not for a lower premium, what is motivating employees to choose a high-deductible health plan (HDHP)?
3.) Allow pre-tax contributions. When you do this, employees get the current tax savings on their HSA contributions, as opposed to waiting for tax returns, while also enjoying the convenience of payroll deductions to contribute to their accounts. This also saves employers on payroll taxes and expenses.
4.) Incorporate wellness. HSAs and wellness can be a great match. An HDHP partnered with an HSA is a clear way to engage employees and motivate positive behavioral change. Employees having to think about their own finances as related to their health can be a strong motivator for change. It will be important to educate and communicate on this topic year-round.
5.) Cover accountholder fees. This may seem like a small thing considering the low dollar amount per month, but covering these fees for employees makes a significant difference in how employees view the value of their plan.
6.) Make sure your plan is compliant and is structured correctly. This goes without saying, but in order to make contributions, wellness incentives, etc., the plan will need to be structured correctly. Brokers/agents and plan administrators have the opportunity to ensure that these requirements are being met in tandem with employers.
While it's difficult to narrow this list down to a few items, we believe these items are key to any plan design for HSAs. Once a plan is making the grade, make sure employers are taking the time to educate and communicate to employees regularly. Year-round communication is key and will help in reaching any HSA goals and ultimately motivating employee behavior change.