Your company probably spent real time and thought on choosing the right benefits to offer, HSAs included. In return for that effort, and the money you're putting into premiums, contributions, and administration, you're expecting something back: cost savings, better retention, and a workforce that's healthier and more engaged. That return only shows up if employees actually participate.

Here's the thing about HSA underuse: it's rarely about employees not wanting the benefit. Most of the time, it comes down to confusing rules, low awareness, and communication that only happens once, during open enrollment, and never again. This post walks through where that participation gap comes from and what actually closes it.

Why participation falls short in the first place

Before jumping into fixes, it's worth naming the actual barriers, because "just communicate more" isn't specific enough to act on.

Rules confusion is probably the biggest one. Eligibility, contribution limits, and how an HSA interacts with an FSA are all genuinely easy to get wrong, even for employees who've had a plan before. Low awareness is close behind. Employees don't always realize the account is theirs to keep for good, or that it can cover a spouse's medical costs even if the spouse isn't on the same HDHP. And then there's timing. Most HSA education is delivered once, during open enrollment, when employees are already sorting through a dozen other decisions and tuning half of it out.

Treat these as communication gaps rather than a sign that employees aren't interested, and the fix gets a lot more concrete.

1. Make eligibility easy to confirm

Even if this isn't the first time you've offered an HSA, employees might not know whether they still qualify. Before, during, and after open enrollment, give them a fast way to check. Anyone who meets your company's benefits eligibility can also open an HSA as long as they:

• Are enrolled in a High Deductible Health Plan (HDHP), and it's their only health insurance coverage

• Aren't claimed as a dependent on someone else's tax return

• Are 18 or older and not enrolled in Medicare or Medicaid

• Don't have or use a General Purpose FSA (a Limited Purpose FSA for dental, vision, or dependent care is fine alongside an HSA)

It's also worth spelling out that HSA funds can pay for a spouse or dependent's qualified medical expenses even if that person isn't covered by the employer's HDHP. The only limit is the annual contribution cap the IRS sets, which adjusts each year.

Sometimes the only thing standing between an employee and enrollment is knowing they're allowed to. Clear eligibility messaging during open enrollment closes that gap with very little effort on your end.

2. Lead with the benefits that actually move people

Once employees know they're eligible, the next question is whether it's worth the effort. This is where a lot of communication falls flat: it explains the rules but skips the "why should I care."

A few points worth repeating, not just once but throughout the year:

• HSAs roll over. Unlike a Flexible Spending Account, employees own their HSA and everything in it, including whatever the employer contributed, and none of it disappears at year end.

• HSAs are portable. Employees keep the account and whatever balance is in it even if they leave the company or eventually move off an HDHP.

• HSAs come with a real tax advantage. Whatever employees put in stays untouched by taxes the whole time it's in the account, and stays that way when it's spent on qualified expenses. That combination is hard to find anywhere else.

• HSAs can double as long-term savings. Because the balance rolls over year after year, employees who don't need to spend it right away are effectively building a second retirement account, one that stays tax-free for medical expenses even after age 65.

• Preventive care is typically covered before the deductible kicks in, which takes some of the sting out of choosing a high-deductible plan.

If you're fielding a lot of employee questions and want a resource to point people to, Lively keeps a running list of the most common HSA questions with straightforward answers.

3. Put employer contributions behind the message

Explaining the benefits helps, but nothing moves participation like backing it with a contribution. Even a modest amount, seeded once a year or matched to what employees put in themselves, does two things at once: it lowers what employees are actually paying out of pocket, and it signals that the company is invested in the benefit rather than just offering it on paper. That signal tends to matter as much as the dollar amount.

4. Point employees toward investing, even if it's just a mention

For employees who won't need their full balance for near-term medical costs, investing what's sitting in the account is one of the more overlooked ways an HSA builds long-term value. This doesn't need a full explanation in every piece of communication. A short mention, with a link to more detail, is usually enough to get the idea in front of the people who'd actually use it.

5. Make the communication a habit, not a one-time event

If there's one shift that matters more than any single message, it's this: stop treating HSA education as something that happens once a year. A few natural moments to build into the calendar instead of leaving it to open enrollment alone:

• Onboarding, for anyone newly eligible for an HDHP

• Right after open enrollment closes, to catch the people who missed the window or didn't act in time

• Mid-year, tied to something concrete like an FSA deadline or the start of a new plan year

• Whenever contribution limits change, so employees aren't working off last year's numbers

None of this requires new information. It just requires saying the same things again, at the moments they're actually useful to hear.

How Lively Can Help

Lively is built to make this easier to put into practice, not just easier to explain. The platform gives employees a straightforward way to check eligibility, enroll, and invest their savings, so the communication you send actually turns into action instead of getting lost. If you're ready to level up your benefits strategy, reach out to our team today.