When was the last time your employees were pleasantly surprised by their healthcare benefits like health savings accounts (HSAs)?
It’s safe to say that when it comes to their covered benefits, employees hope for reliable coverage and security for their personal needs and those of their dependents, reasonable premiums and minimal administrative hassle.
That’s not too much to ask, but savvy HR teams have realized that benefits can deliver much more for both employees and organizations. As a result, they are creating comprehensive benefits programs that go beyond these base expectations and that can serve as hiring and retention tools for their organizations.
HSAs are a core component of 22% of benefits plans, and they are a prime example of how employer-sponsored benefits can actually deliver happy surprises that lead to increased benefits utilization and satisfaction.
Enrollment in HSAs continues to increase and is expected to exceed 36 million accounts by the end of 2023, indicating that employees want and need flexible, reliable ways to help pay for healthcare expenses. Meanwhile, recent increases in contribution limits for 2024 give employees more opportunities to protect their hard-earned dollars by allowing them to contribute more to their accounts and use those funds in surprising ways.
Understanding what’s eligible and how HSAs work are key factors in employee funding, utilization and long-term satisfaction. According to data from HSA Store, account holders who are exposed to educational information about their HSA and how they can use funds contributed $177 more to their HSAs in 2022 than the average HSA user, illustrating the connection between account education and utilization.
3 ways to create ‘A-ha!’ moments with HSAs
The more your employees know about how their HSA works and how it can be used in conjunction with the other benefits your organization offers, the more likely they are to enroll, engage and re-enroll during the upcoming open enrollment period.
Here are three ways you can use employee education and communication to create happy surprises for your employees throughout the year.
1. Highlight the surprisingly eligible expenses
It’s common knowledge that HSAs can be used for dental and vision care as well as elective procedures. But most people are not aware of the many surprising ways to use HSA funds to pay for products and services that meet everyday health and wellness needs.
For example, according to shopping statistics from HSA Store, items like breast pumps, pain relief devices, foot circulation devices, acne light treatment devices, genetic health testing services and weighted massaging heating pads are among the most surprisingly eligible expenses for HSA users.
It’s also important to illustrate to employees how HSAs can be used to support and expand their existing health plan coverage. Services like acupuncture are increasing in consumer popularity, but may not be covered by health insurance — but these services are HSA eligible. Likewise, HSAs can be used to pay for mental health or counseling services that may not be fully covered by the health plan, as well as fertility treatments, and even sleep deprivation treatments.
Once employees learn that HSA funds can be used for these types of products and services, contributions tend to increase.
2. Don’t underestimate the power of everyday health
When employees manage their overall health and well-being, they are more productive, have fewer absences and tend to have lower healthcare claims costs. However, the cost of staying on top of everyday health can really add up for employees.
Fortunately, an HSA can provide much-needed financial support and relief when employees discover they can use tax-free funds to pay for things they are already purchasing on a regular basis, such as:
- Over-the-counter allergy relief products
- Menstrual care products
- Antibiotic ointments
- Acne and eczema treatments
- COVID-19 tests, and
- Deep muscle pain relief devices.
Knowing this, employees can maximize the power of their HSA by using tax-free dollars to pay for these routine purchases. Meanwhile, they can increase their contributions, make a one-time contribution and even reimburse themselves at a later date for these purchases, thereby maximizing the tax benefits of their HSA.
3. Help employees maximize their tax savings
It might surprise you and your employees to learn that they can save as much or more than 30% when they contribute to an HSA, depending on their tax bracket.
Help employees maximize the savings potential of their HSA even if they don’t fully fund the account from the moment they enroll.
Employees have the option to fully pre-fund their HSA, fund their account in inecrements over time or make a one-time contribution to their account for these routine items. If employees do not pre-fund their HSA, they can still make purchases for goods or services, then fund their HSA at a later date and reimburse themselves. Direct employees to resources like online expense trackers to help them save and organize receipts by plan year to make this process easier.
These steps will allow employees to achieve the full tax benefit of their account. It’s also helpful to give employees access to online calculators that will help them determine their tax savings, how much to contribute to their HSA and to map out how they will use the funds now or in the future. These interactive calculators can also illustrate potential future value if they continue to fund and use the account based on their enrollment in a qualified high-deductible health plan.
When employees truly understand the financial advantages of enrolling in an HSA, they can begin to use the account as both a healthcare and a financial tool, thereby increasing the value of this benefit.
With open enrollment right around the corner, there are many benefits of educating employees about company-sponsored HSAs and how they work.
By increasing awareness and account knowledge, not only can HR teams impact adoption, but they can also positively influence utilization throughout the year and help employees derive greater satisfaction from their overall benefits program.