Employers can give employees a bit moreimpetus to focus on their HSAs, says a new report. (Photo:Shutterstock)

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Contributions to health savings accounts are up. However, therising cost of health care is keeping account owners from takingfull advantage of HSAs. But there are some things employers can doto help.

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So says a report from UMB Healthcare Services. It points out that althoughaccount owners are spending on the right things, what they're notable to do is hang onto the money long enough to head off higherfuture costs—or take advantage of HSAs' other features.

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Those features include the ability to invest the assets in aHSA, assuming that those assets stay in the account long enoughrather than going to pay for health care.

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Not only are more people saving more in HSAs—more than 22 million people were enrolledin HSAs at the end of 2017, with total assets reaching around $45.2billion—but they're spending more on current health careexpenses.

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And that's not likely to change. The report notes, “According tothe CMS Office of Actuary, heath care spending is projected to hit$5.7 trillion by 2026, a 5.5 annual percent rise from the current$3.5 trillion.”

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Average HSA balances have hardly risen since 2016, when theytotaled $1,472. In 2017, they reached $1,741.

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Employers, says the report, can give employeesa bit more impetus to focus on their HSAs, citing Devenir researchat year-end 2017 that says, “employer relationships became theleading driver of new account growth, accounting for 41 percent ofnew accounts in 2017.”

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A major way that happened was from employer contributions, wiith“[t]he average employer contribution … $604 with the averageemployee contribution of $1,921, for a combined annual total of$2,525. In accounts not associated with an employer, the averagecontribution was $1,475.”

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In other words, employer contributions and ongoing matchingsupport spurred higher savings rates among employees.

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Other actions employers can take to boost employee savings inHSAs, the report says, include the following:

  • Provide educational resources all year long to increaseemployee financial wellness.
  • Offer an online investment platform that allows employees toinvest those HSA savings.
  • Assist employees during open enrollment to help them learn moreabout HSAs.

HSAs were meant to be used for approved medical expenses. Butthe additional benefits built into them, such as the ability toinvest funds, are benefits HSA owners are currently missing outon.

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READ MORE:

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2019 HSA contribution limits: What advisors,employers, and employees need to know

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Are HSAs worth the effort forTPAs?

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Advisors see HSAs as opportunity

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