Broker Advice: Adding an HSA to your Health Offering
- 3 min read
The challenge of creating a balanced offering for employers in an expensive health benefits landscape leave many of us feeling short on options. However, by coupling health benefits together we can help alleviate the ever growing conflict between costs and benefits.
Broker HSA 101
Health plans are a complicated sort, but two key points bubble to the top. When comparing an HDHP to a PPO, two things become perfectly clear: HDHPs are cheaper for employers, but PPOs offer more benefits and lower deductibles for employees. Typically, employers have flocked to PPOs to create robust healthcare plans and we all know health benefits are a great recruitment tool for employers. HDHP lacked a balanced offering that most employers have typically wanted, but they loved the lower costs of HDHPs. Enter the HSA. An HSA will add the balance you want when offering an HDHP. Likely the reason, since 2013, HSA enrollment jumped an astounding 53%. It will keep employer costs low and allow for flexibility of long-term health savings and employer contributions, that employees want. An HSA is like a 401k for healthcare, but better.
Value of an HSA
You can read about the full list of benefits here, but let us give you a taste in case you aren’t unfamiliar. Most importantly, HSAs are the only health tool that offer long-term savings. Individuals own their HSA account so can take it with them year to year and job to job. Unlike an FSA, an HSA has not “Use it or Lose it” provision, so money (employee or employer contributed) rolls over right into next year, without any interruptions.
Here are a few additional key benefits:
- Tax-Free Money – Paying for healthcare costs with your HSA mean that you are saving 25%* through triple tax benefits (tax-deductible contributions, tax-free interest and tax-free withdrawals (for medical expenses)). Employees can use tax-free money from your HSA to pay for health expenses and minimize real costs.
- Long-Term Savings – With or without employer contributions, employees are creating long-term savings account to pay for any health expenses throughout their lives. Even with Medicare, average healthcare expenses for retirees are $275,000 (per couple)! Having an interest-bearing HSA will help mitigate these health costs. After 65 years of age, individuals can use their health savings account money for non-health related expenses. It’s just another interest-bearing account similar to a 401k or IRA.
We should also mention Lively is paperless and fully automated so employers can onboard their employees in mere minutes. If something does come up, our customer service team is ready to take care of it for you. Don’t waste your time, let our team of HSA experts help you.
Cost of an HSA
If you have gotten to this point, hopefully, you see the value on an HSA, as part of a healthcare offering. Ok, what does it cost? This might not be universally true, but a Lively HSA has simple transparent pricing and is free for individuals. That means no hidden fees that limit employee’s health savings. For employers, it’s $2.95 pepm. Coupling the health benefits value of an HSA with Lively’s straightforward and transparent pricing makes it an obvious addition to every employer’s health offering.
One Stop Shop
The last and often forgotten element of this process is time cost to employers. Adding benefits (new platforms, new providers, etc) can increase time loss. This can lessen the value of cost-effective health offerings, even if it be a small amount. Time is money (and productivity). Adding benefits that already integrate with employer’s existing systems is crucial. Lively syncs with 9 of the popular online payroll systems to make HSA management seamless and fully automated for employers. While transparency is one of our pillars, convenience doesn’t fall far behind!
If you need more help with HSA decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
*25% assumes income taxes (both federal and state) of 25% or more per individual or family.
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.