Health Savings Accounts (HSAs) are popular savings programs designed to help employees with high-deductible health plans (HDHPs) pay for out-of-pocket medical expenses. But they offer a number of benefits for all employees, especially millennials.
Pairing an HSA with an HDHP gives employees of all ages greater flexibility and control over their healthcare spending.
But the greatest benefit for the millennial generation “is an HSA’s ‘triple tax savings’ combined with how time can amplify those savings to grow an individual’s account,” says Tom Torre, CEO of Bend Financial. HSA funds can be contributed pretax, grow tax-free and be withdrawn tax-free if used for qualified medical expenses.
For example, a 30-year-old can accumulate more than $500,000 assuming a 6% rate of return until age 65 and continued contributions to their account each year, he says.
Typically, younger employees are less likely to have to tap their HSA to pay for medical expenses compared to older employees. But they can be a great tool for health savings if unfortunate illnesses happen, such as
Easier to enroll
Some HSA administrators are using technology to make them easier to enroll in and use. This is making HSAs easier, faster, less complicated to open and manage – and more appealing to millennials. New HSA administration platforms can eliminate the complex enrollment and paperwork process, while providing employees with
real-time information and guidance.
To get more employees to enroll in an HSA, ensure information is being delivered where your employees are, says Torre. “Communicate via email, text or in person via planned education sessions held over lunch or in break rooms,” he suggests.
Millennials might also have particular preferences in terms of how they want to be contacted. Tools such as chatbots and conversational assistants can also answer employees’ routine questions more quickly.