New Study Reveals Opportunity to Improve HSA Engagement

Forget the idea of turning every health savings account (HSA) into a retirement nest egg. Many employees use their HSAs for everyday medical expenses – roughly 75% of HSA funds go toward prescriptions, urgent care, and immediate needs rather than future savings, according to a study from InComm Benefits. Yet confusing paperwork, reimbursement rules, and coverage limits make using these accounts anything but simple, limiting HSA engagement.

HR can change that. They don’t need to be HSA experts, but by simplifying the process, they can help employees understand and use their accounts effectively. Bruce Sattley, Chief Product Officer at InComm Benefits, explains what HR can do to help employees get more out of their accounts.

First, it helps to see where employees get stuck.

Common Barriers to Employee HSA Use

Using an HSA should feel simple – but the survey shows that isn’t always the case:

• 54% of participants reported having their HSA card declined at checkout for items that qualified
• 64% said they avoid using their account when unsure about coverage
• 40% delayed care because they weren’t sure about coverage and couldn’t afford the upfront cost.

HR teams may not always recognize these obstacles, but they affect employee participation and satisfaction.

In Sattley’s view, HR should take a broad approach when communicating about HSAs. Rather than focusing only on employees who treat their accounts as investments, HR should consider overall engagement and identify where employees have problems when using their funds. Confusing processes often cause many to miss out on tax savings.

How HR Can Help Boost HSA Engagement

HR can make HSA use easier by clarifying paperwork, explaining reimbursements, and introducing digital tools that guide employees through the process. 

Automation and mobile platforms can track expenses, provide notifications, and offer practical reminders, helping employees make the most of their accounts while reducing confusion and administrative burden. Even small improvements, like clearly listing eligible expenses, can strengthen financial wellness and ensure employer contributions have real impact.

3 Practical Solutions That Simplify HSA Use

Many platforms now include features that make using an HSA simpler and help employees handle everyday medical expenses with confidence. 

1. Managing Confusion at Checkout: Unified Debit Cards

Employees often feel embarrassed when their HSA card is declined at checkout or frustrated when purchases aren’t clearly eligible for their HSA. 

A unified debit card solution can simplify checkout by reducing errors and unexpected declines.

2. Easier Recordkeeping: Automated Expense Tracking

Keeping track of receipts and verifying eligible costs is a common pain point that can lead to missed reimbursements or IRS compliance risks. 

Automated expense tracking that recognizes eligible charges and securely saves receipts reduces this burden for employees. 

3. Flexibility When Balances Are Low: Delayed Reimbursement

Many employees struggle early in the year when their HSA balance hasn’t yet built up, but they have immediate healthcare needs. 

Delayed reimbursement options allow employees to pay healthcare costs out-of-pocket and reimburse themselves later, preventing delays in necessary medical care due to low balances. 

“Much of what we at InComm build focuses on making HSAs easier to use,” Sattley explained. For example, InComm’s HSA card can automatically identify eligible expenses and properly route charges, ensuring eligible costs go to the HSA and non-eligible ones to a linked backup account, like a personal checking account. 

Plus, the platform’s automated expense tracking helps employees manage their HSAs without worrying about paperwork or lost funds, he explained. And it has a Spend Now, Contribute Later option that supports delayed reimbursement and even sends personalized alerts reminding employees to contribute to their HSA after purchases.

Closing the Gap Between HSA Potential and HSA Use

Employees often underestimate how much they spend on HSA-eligible care. In the survey, participants guessed about $2,000 a year, but actual expenses averaged closer to $4,500. 

On top of that, more than two-thirds regularly pay out-of-pocket health costs that aren’t reimbursed through their HSAs. This means many employees leave a significant amount of HSA funds untouched – money that could help pay for medical costs.

Closing this gap between perceived and actual healthcare spending requires ongoing HSA engagement. For example, InComm offers 2% cash back on all purchases – HSA-eligible or not – credited monthly to help grow HSA balances. Automated alerts also remind employees to maximize their contributions and reimbursements on time.

The key is helping employees stay engaged year-round, not just during open enrollment, Sattley pointed out. “Our HSA card and app show employees what expenses qualify, track spending automatically and even offer cash back. This helps employees see the real value of their HSAs.”

Features that Drive HSA Adoption and Usage

Survey results show employees aren’t asking for more investment options – they just want an easier way to use their HSA funds. 

“Hands down, the cash back feature is the biggest attention grabber for employees,” Sattley said. “Automatic sorting at the point of sale is also critical – it identifies eligible expenses employees might not realize, making HSA use easier and more seamless. Features like spend-now-contribute-later are valuable for a smaller set of employees, but overall, these tools simplify the process and keep people engaged.”

What do employees want most? The top priorities reported by participants highlight areas where digital features could make a tangible difference in HSA engagement:

• Automatic expense recognition at checkout: 97% of respondents said they would be more likely to use their HSA if eligible items were automatically recognized and sorted
• Same-day reimbursement: 73% said same-day reimbursements would boost HSA engagement
• Instant credit to account instead of check or direct deposit: 67% said this would motivate more frequent HSA use
• Cash-back or rewards-style incentives: 61% said rewards would encourage more frequent spending on HSA-eligible items

Here’s the good news: Knowing what employees want makes choosing the right platform easier.

How to Choose the Right HSA Platform

Selecting a strong HSA platform does more for adoption and usage than constant HR interventions.

“Prioritize features that create a strong employee experience with automated notifications, clear expense sorting, and straightforward guidance. This approach not only benefits employees but also eases HR’s workload by preventing common issues,” Sattley explained.

From an HR perspective, select HSA platforms that:

• Offer robust account management and self-service portals for easy employee access
• Simplify administration and reduce support demands
• Include built-in compliance safeguards
• Provide automated employee guidance to minimize routine inquiries
• Integrate with existing HR systems
• Deliver responsive provider support

Choosing a platform that balances employee ease with HR efficiency helps maximize the value of HSAs for everyone involved.

Next Steps: Continuous Reviews for Better Outcomes

As Sattley emphasizes, regularly reviewing and updating the company’s HSA approach is essential. New tools and options frequently emerge, and taking time to assess them helps ensure employees receive a valuable HSA benefit as part of their total compensation.

By staying proactive, HR can increase HSA engagement, simplify processes, and make HSAs a benefit employees truly value.

Want to Learn More About HSA Engagement?

Knowing what employees struggle with is only part of the challenge. Understanding what’s behind low utilization – and how to change it – is just as important.

Join HRMorning for a free webinar, Why Your HSA Isn’t Working the Way You Think: New Research on Employee Behavior, on Wed., June 10, 2026. Sessions are available at 9 a.m., 12 p.m., and 3 p.m. EDT. Register here.