They don't understand them, or they don't know enough about them to see why they should be using one.

That's employees' attitudes toward health savings accounts, according to the Willis Towers Watson 2018 Health Accounts Employee Attitudes Survey, which finds that just 25 percent of employees consider saving in an HSA to be a top priority—even though 82 percent of workers regard medical expenses as their biggest challenge.

Among the employees who said they didn't enroll in an HSA, 69 percent said they chose not to because they didn't see the benefit, understand HSAs or take the time to understand them.

In fact, employees are using HSAs as spending, not savings, accounts, despite the fact that such accounts are “triple-tax advantaged.” Allowing employees to set aside part of their pay pretax, thus reducing their tax liability, the accounts also give them the chance to pay their medical expenses with that pretax money and not be taxed on the withdrawal. In addition, funds in the accounts can be invested and any growth on those investments is not taxed if used to pay medical expenses.

And since the money in the account is the employee's, it can be used as a retirement savings account if that employee retires or leaves his employer.

Despite these possibilities, the survey finds that 65 percent use their HSA money for current large and small health care needs, with only 8 percent instead work to hold onto that money for the future. As a result, only 45 percent have more than $5,000 saved.

About a quarter of those who didn't enroll in an HSA say they don't have enough money to do so at present; 63 percent of those who did enroll say they put aside what they can afford each month. So taking advantage of an HSA may be limited by an employee's financial position or even the employee's giving higher priority to a different account, such as a pretax 401(k) or an FSA.

Even when they have an HSA, they don't use it as efficiently as they could, much as they do with other savings vehicles—for instance, just 22 percent max out their 401(k) contributionn to gain the full employer match before they start putting money into an HSA. And only a quarter contribute to the HSA before their 401(k) if there is no employer match.

And even though 69 percent of FSA enrollees reviewed their previous health care expenses to determine their contribution, many employees are still losing money when opting into FSAs—by not putting aside as much as they could have (48 percent), trying at year end, without careful planning, to use up what they've put into the account (36 percent) and then having a tough time doing so (32 percent).

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HSAs not priority for employees despite features

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