Opinion: Employers responsible to educate staff on HSAs

As more companies look to better manage rising employee benefit costs while simultaneously promoting a healthy work force, many employers have turned to consumer-directed health care, specifically adopting a health savings account strategy. One of the primary challenges for these employers is educating employees about all the benefits of HSAs. Most companies focus their efforts on enrollment procedures and the mechanics of depositing and spending funds from the accounts. To truly realize the benefits of this strategy, however, employers need to focus more energy on educating employees and their families on the long-term benefits.

Beyond use-it-or-lose-it
HSAs have a distinct advantage compared to flexible spending accounts because they allow for year-over-year rollover of funds deposited. During open enrollment, HSA education tends to be lumped in with FSAs and other benefits, so employees often miss that critical difference. What makes an HSA such a powerful savings tool is that employees can use the funds to pay for health care expenses now and in the future by letting the accounts grow over time. Open enrollment and ongoing communication efforts should include hemore detailed HSA education, along with examples of how the account can be used to save for future expenses.  

Long-term thinking
In addition to the tax advantages realized on contributions, since deposits grow tax-deferred and distributions are potentially tax-free, the long-term investment opportunity with an HSA is tremendous. Today, many HSAs offer investment options ranging from money market accounts to mutual funds to individual equities. While many factors will determine the actual returns these investments make, the bottom line is that regardless the level of risk, investment options are currently underutilized.

Next Steps
Open enrollment season is an ideal opportunity to take HSA education to the next level, but it must be simple and personalized.

A great first step to helping employees better understand the power of their HSA dollars is showing sample scenarios that are tailored to the employee population. “People like me” scenarios can help employees choose the right medical plans based on their needs and budgets. This same approach can help employees understand how HSAs can serve them now and in the future with funds covering health care expenses in retirement.

Investing in year-round communication is a critical step to helping employees maximize their HSA benefits, since messages need to be repeated and reinforced across multiple channels before they sink in.

Start with a strategy, identifying objectives, audience needs, key messages, available channels and success measures. Take advantage of the strategies, online tools and educational opportunities provided by the HSA administrator, customizing them for employees’ needs.

HSAs should not be treated as pseudo-checking accounts for medical expenses but as unique and powerful savings tools that can provide current tax deductibility, tax-deferred growth and (potentially) tax-free distributions. Now is the time to let employees know how to get the most from their HSAs.

Dennis Triplett is CEO of Kansas City-based UMB Healthcare Services, a division of UMB Bank. He may be reached at dennis.triplett@umb.com.[[In-content Ad]]