The Business Case for Spending Account Providers: Getting Finance to Say Yes

It’s open enrollment season, and with it, another round of decisions about next year’s benefits lineup. Medical plan designs usually get the lion’s share of the attention, but spending account providers also impact both cost and administrative workload.

As benefits budgets come under review, HR has an opportunity to put the program’s costs and value in front of finance.

The Numbers Finance Needs to See

HR may know a spending account program adds value, but that argument carries little weight with finance unless it’s backed by numbers. To make the case, HR needs to show what the program costs, how much administrative time it requires and what the company gets in return. The numbers most likely to get finance’s attention include:

• FICA and payroll tax savings from HSA contributions
• HR and payroll hours spent administering the program
• Current provider fees
• Cost per employee
• Participation rates, and
• Utilization rates.

Together, these numbers give finance a clearer picture of the program’s costs and potential savings. A side-by-side comparison of the current provider and alternatives shows the total cost of each option, including one-time transition expenses and potential long-term savings.

Showing the Employee Value

The employee side of the equation is becoming harder to dismiss. A HealthEquity study found that 56% of Gen Z and 50% of Millennials reported having an HSA, compared with 35% of Gen X and 24% of Boomers. That’s especially relevant as Gen Z and Millennials now make up about 54% of the U.S. workforce. 

HealthEquity CEO Scott Cutler said Gen Z and Millennials understand the need to save for healthcare and are taking advantage of tools like HSAs, but they’re doing so in an economy marked by higher costs and greater uncertainty. That makes the employee experience with the account particularly important.

But simply offering an account doesn’t guarantee employees will use it. An InComm Benefits study found that 54% of participants had an HSA card declined at checkout for an eligible purchase, while 64% said they avoid using their account when they’re unsure whether an expense is covered. A spending account provider that makes the account easier to use can strengthen employee engagement. 

Spending accounts also extend beyond traditional HSAs. Lifestyle spending accounts, for example, give employers another way to tailor benefits to employee needs, while a broader range of options can increase the value employees get from the company’s benefits spending.

Data on employee participation and utilization gives finance teams a way to assess whether employees are getting meaningful value from their spending accounts. Strong participation supports continued investment, while employee feedback shows whether the account is meeting employee needs. Recruiting and retention data can further strengthen the case.

The Cost of Switching Spending Account Providers

Finance teams are also going to look at the cost of making a change. Switching spending account providers usually involves one-time implementation expenses, payroll and technology integration work – plus extra demands on HR and payroll. Finance will want to see how the projected savings stack up against those costs. 

The key considerations include:

• Implementation costs: Setup fees, data migration, employee communications and other one-time expenses
• Internal resources: Estimated hours HR, payroll and other teams will need to support the transition
• Payroll integration: Work needed to connect the provider with payroll and ensure contributions and deductions are handled correctly
• Technology integration: How the provider connects with the company’s HRIS and benefits administration systems, including ongoing maintenance requirements, and
• Transition timeline: How the change fits with open enrollment, payroll schedules and the start of the new plan year

The Cost of Inaction

Sticking with the current provider can carry costs of its own. A 2025 Origin report found that 46% of senior HR, reward and benefits professionals said their current procedures and processes with providers expose their organizations to undue risk. Another 40% said they weren’t confident in the accuracy of their benefits spending. 

Those findings give HR another point to bring to finance. Administrative inefficiencies, unnecessary fees, and contribution or reporting problems can add costs or create risk over time.

Employees pay attention to the benefits they’re offered, especially when they’re considering a job change. If a competitor offers a popular spending account that your company doesn’t, that benefits gap could convince your best employees to jump ship. Benchmark the current offering your company provides to help finance evaluate whether changing spending account providers makes sense. 

HR Action Steps

If you’re looking at spending account providers, these action steps can help you build a solid business case:

1. Pull current provider fees and calculate the cost per employee
2. Compare participation and utilization to assess employee engagement
3. Quantify the HR and payroll time required to administer the account
4. Calculate applicable payroll tax savings and other direct financial benefits
5. Benchmark the current offering against competitors
6. Estimate the costs, internal resources and risks involved in changing providers, and
7. Bring the numbers together in a business case before renewal decisions are finalized.