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It's not that employees don't care about Health Savings Accounts. It's that they don't seem to understand them. Which is why there are employers whose employees are on high deductible health plans but haven't established an HSA.
Recently a national survey by university researchers on adults enrolled in HDHPs found that nearly 1 in 3 respondents didn't have an HSA. Those who actually were HSA owners weren't contributing to it in 2019, and they were typically lacking education and health insurance literacy.
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This isn't necessarily the fault of the employees, nor their employers — employers are very much aware of the need for HSA education for their employees.
In fact, it's not the administration of HSAs that's the biggest concern among employers — in a recent survey by the Plan Sponsor Council of America, around 29% of employers had primary or secondary concerns about the difficulty of administration.
It's not compliance either, which was a primary or secondary concern for 25% of PSCA respondents. And it wasn't investment options either — which were the primary or secondary concern of 25% of respondents as well.
No, the greatest concern expressed by 74% of employers was educating employees about HSAs.
That's no surprise to Kim Tippens, Senior Director of Benefits Accounts with Willis Towers Watson. Tippens is the author of a WTW whitepaper, "Six keys to help your employees unlock the potential of HSAs" that identifies and answers six questions to help employers understand HSAs and help employees take advantage of them.
" Benefits are confusing, period," she says. "Not for us in the business, but for others." Which is why, she says, although it seems obvious, communication is such a critical aspect of offering an HSA.
Employers need to think about their unique employee population and anticipate what information might need clarifying, she says.
Details can make a difference, such as pointing out how different demographics and generations can use an HSA, how an HSA is more flexible compared to an FSA, and how the HSA funds belong to the employee even if they are laid off or leave the job.
"It's important to have a strong communication plan explaining what it is, how you enroll, how to use it, how it's different from an FSA," she says. "Employers need a partner who can break the concepts of HSAs down and help employers show employees that it's a valuable tool."
Other things to look for in an HSA partner, she says, include the product's ease of use, how much help the partner gives in implementing it, what the ongoing support consists of, whether the partner offers a variety of tools and means of communication including paper, online, and mobile, and what investment options might be available, should employees go that route.
In addition to a robust communication plan, the university researchers found that certain actions employers take to encourage employee retirement plan participation can also be applied to HSAs. These include offering default contributions to HSAs, employer matching of employee HSA contributions, and helping employees commit to putting future wage increases or bonuses into a health savings account.
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