At Lively, we’re all about making HSAs more accessible and easier to use. That’s no small thing considering that only 17% of employees without HSAs are saving for future healthcare expenses, according to a 2022 Bank of America report. Encouraging employees to adopt HSAs makes sense for employers, too. It can be a powerful recruitment and retention tool that makes for happier, healthier employees. There are also some financial benefits for employers.
This is all to say that HSAs can be a win-win for everyone. In my experience, it comes down to getting your employees to see their value and removing any barriers to enrollment. At Lively, we tackle that in a few different ways. As Lively’s VP of People, I’ve seen what can happen when employers prioritize HSA education. Here’s what that looks like in practice.
Driving adoption is critical but easy to overlook
You may have put a lot of time, energy, and good intentions into your benefits program—and that’s great! Putting employees first is always the most important thing. But even the best HSA program can have a lackluster reception if employees aren’t made aware of how it works. Driving adoption is key, but it’s often a missing step when an employer rolls out new benefits.
To help drive benefits adoption, it’s helpful to put yourself in your employees’ shoes. As an employee, being presented with a comprehensive benefits plan might feel overwhelming, especially if there’s a lot of information to sort through. At Lively, HSA education is folded into employee onboarding. We cover everything from how they work to the nuts and bolts of enrollment. Building out a simple education campaign can go a long way. The goal is to drive home the benefits of HSAs and support employees in signing up.
How Lively educates our employees about HSAs
Again, HSA education is baked into the employee experience at Lively. Adoption is high because our employees understand what an HSA is and how it works. That’s an important detail that directly drives enrollment. We share information about:
- High-deductible health plans and how they work with HSAs
- How to enroll in an HSA and manage it using the Lively platform
We also discuss the perks of an HSA, which include the ability to:
- Deduct HSA contributions on your federal tax return
- Enjoy tax-free investment gains
- Avoid paying taxes on withdrawals that are used for qualified medical expenses
- Use HSA funds as taxable retirement income once you turn 65
How you share HSA information is up to you. You might opt for an interactive workshop (in person or virtually) where employees can ask questions and sign up on the spot, a series of email campaigns educating them on different aspects of HSAs and walking them through the signup process, a resource hub with self-guided training, or benefits offices hours, where employees can drop in and ask questions. Whichever approach you choose, you’ll want to do this during new hire onboarding and again each year during Open Enrollment. Often, your benefits broker will be willing to partner with you or to run these sessions themselves, and to provide materials for you to use to educate your employees.
Reasons to contribute to employee HSAs
Employers have the option to contribute to HSAs on behalf of their employees. This is something Lively does for a number of reasons.
It can help you attract the best talent
Benefits always matter; even more so in a competitive job market. The truth is that employees care about more than just their salary. They’re also looking at benefits like health insurance, paid time off, parental leave policies, flexible work arrangements, and more. HSAs are a valuable part of this package. They show potential new hires that you’re ready to invest in their well-being—along with their financial health—if you’re willing to contribute to their HSAs. That Bank of America report mentioned earlier found that when an HSA is offered, 89% of employers make a contribution.
It can go a long way in terms of employee retention
Offering robust employee benefits isn’t just good for recruitment. It can also set the stage for employee satisfaction and loyalty. To qualify for an HSA, employees must be enrolled in a high-deductible health plan. These usually have lower monthly premiums when compared to low-deductible plans. Some employers will pick up the cost themselves to encourage employees to choose that plan and adopt an HSA. It’s another worthwhile employee benefit to consider.
It can help employers save money
Opting for a high-deductible health plan will likely lead to lower premiums—and reduced healthcare costs for employers. You might choose to redirect some or all of those savings toward employee HSA contributions. What’s more, these contributions count as a tax-deductible business expense for employers. When taken together, it’s easy to see how HSAs can help companies save money while they support their employees.
Getting your employees on board with an HSA doesn’t have to be complicated, but it will likely require some time and attention upfront. The end result is usually worth it. Connect with Lively to bring your benefits package to the next level.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.