HSA vs FSA: Help employees find the best fit during open enrollment

Another open enrollment season is officially upon us, and as employees ponder the benefit choices your organization is offering, they are likely paying extra attention to benefits that support their financial needs and situation. As record-high inflation continues to affect individuals, families, and organizations that provide health benefits, solutions that support physical and financial wellbeing for employees are more important than ever. The good news is, you may already have two essential solutions in your toolbox: a flexible spending account (FSA) and health savings account (HSA).

Health benefits go hand-in-hand with finances, but particularly so at a time when out-of-pocket health care costs are soaring and employees are paying more for everything from bandaids to rent or mortgage payments. It’s no surprise, then, that adoption of FSAs and HSAs continues to increase because of their ability to relieve some of this financial burden. Yet, confusion about FSAs and HSAs persists, and that can lead to lack of utilization by employees, low re-enrollment, poor employee satisfaction scores, and – worst case – forfeitures of unused FSA funds.

HR teams are the key to mitigating employee confusion and to ensuring the employees have a smooth and satisfactory open enrollment. As you launch open enrollment communications this fall, here are four things employees need to understand to better assess and select the account type that best fits their needs.