A confident banker talks to two business partners about how offering an HSA can improve their business.

HSAs and commercial bank customers

Lauren Hargrave - Headshot

A couple of older Americans at their kitchen table looking over retirement planning documents on a laptop and thinking about how their HSA fits in.

retirement planning with hsa

A woman HR professional gives a presentation about health plan sign up and HSA options

HDHP adoption

White text reading empathy and innovation against a blue background with a smiling man and the Lively logo

Sustainable best-in-class employee benefits

Diverse group of three women and two men dressed professionally at a conference table in a commercial bank happily discussing HSA partnership options

Financial institutions hsa partnership

Green background with a woman holding a cell phone that reads "Integrity and innovation" in white text

integrity and innovation 

Adam Berry

earn-for-retirement

A man and a woman work out together in a gym  - the woman is a personal trainer paid for with the man's LSA

employee fitness and wellness

lively

A group of employees chat and enroll in health benefits in an office

enroll employees in hsa

A green background with "People first benefits" in white text and a smiling man.

People first benefits HR thought leadership

using-benefits-wisely

Two women meet with a smiling man who is a financial advisor in an corporate office

financial advisors and hsas

Blue background with the words "humanize benefits" in white with a woman holding a tablet

Humanize Benefits Banner

A group of coworkers, including one man and three women, gather around a computer in a conference room to review open enrollment strategy.

open enrollment resources

Jessica Pfisterer

Jessica Pfisterer, VP of People, discusses how to build a best-in-class benefits package that maximizes value for HR leaders and employees.

How to Balance Employee Benefit and HR Administration Needs

What HR leaders and benefits professionals should look for to find the right HSA provider for their company and employees.

What HR Leaders Should Look for in an HSA Provider 

Open Enrollment

Lively can simplify your understanding of open enrollment. Here is what you need to know about open enrollment, healthcare, benefits, retirement, and of course HSAs.

Lauren Hargrave is a writer from San Francisco who focuses on technology, finance and wellness. She follows comedians like most people follow bands and believes an outdoor sweat session can cure almost any bad mood. She’s also been writing her first novel for so long, her mom doesn’t ask about it anymore.

Lauren Hargrave

Lively can simplify your understanding of HDHP. Here is what you need to know about HDHP, healthcare, benefits, retirement, and of course HSAs.

HDHP

Employee Benefits

Lively can simplify your understanding of employee benefits. Here is what you need to know about employee benefits, healthcare, retirement, and of course HSAs.

Employee benefits

Adam Berry oversees Lively’s Financial Institution Partnerships channel and works with banks across the country to develop and implement HSA product solutions. Over the last 20 years, Adam has gained a significant amount of HSA experience working for national TPAs and creating HSA programs within brick-and-mortar regional banks. HSAs are a personal passion of Adam’s, and he specializes in bringing entities together to discuss transparent, unique, and innovative solutions that result in a better way to do business, increase revenue for Lively’s banking partners, and improve the lives of their mutual customers.

What financial institutions should look for in an HSA provider to ensure a productive, profitable relationship and gain and retain customers.

What Financial Institutions Should Look For in an HSA Partnership

Personal Finance

Lively can simplify your understanding of personal finance. Here is what you need to know about personal finance, healthcare, benefits, retirement, and of course HSAs.

Learn how your HSA can help you in retirement and other retirement tips in his collection of articles 

Retirement Articles

Are all of your eligible employees enrolled in an HSA? Here, you’ll discover how to improve Health Savings Account participation.

How to Get Your Employees to Participate in HSAs

Lively can simplify your understanding of retirement planning. Here is what you need to know about retirement planning, healthcare, benefits, and of course HSAs.

Retirement Planning

Lively can simplify your understanding of benefits in these articles.

Benefits Articles

As Vice President, People at Lively, Jessica leads the recruiting, HR, people operations, and employee experience functions. She brings an innovative approach to people teams and company culture based on her experience leading people teams at fast-growing startups. Her expertise in total rewards, engagement, and leadership allows her to partner with senior leaders on strategic people initiatives to drive the business forward. Jessica was the first people operations hire at MuleSoft, where she built and managed the function during international hypergrowth. At Greenhouse, she again started and grew the people operations function, along with the employee experience function, during a period of sustained growth. Jessica is a Senior Certified Professional by the Society for Human Resource Management. She holds a JD from Georgetown University and is an inactive member of the California Bar Association. 

Lively can simplify your understanding of HSAs. Here is what you need to know about HSAs, healthcare, benefits, and retirement.

HSA Articles

The key information financial and investment advisors need to know about Health Savings Accounts (HSAs) and how they help their clients build their retirement savings.

What Financial and Investment Advisors Need to Know About HSAs

Health Savings Accounts

Lively can simplify your understanding of benefits. Here is what you need to know about healthcare, benefits, retirement, and of course HSAs.

Benefits articles

Benefits

Lively can simplify your understanding of HSA partners. Here is what you need to know about Lively partners, healthcare, benefits, retirement, and of course HSAs.

Lively partners

HSAs are an impactful, and often overlooked, product to enable banks and credit unions to attract, and retain, high value commercial customers.

How HSAs Help Financial Institutions Gain and Retain Commercial Customers

Lively can simplify your understanding of HSAs. Here is what you need to know about healthcare, benefits, retirement, and of course HSAs.

Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache. 

Lively

Retirement

Jessica Pfisterer, Lively's VP of People, discusses strategies HR leaders can use to help drive HSA adoption and what those look like in practice.

How to Support Employee HSA Adoption

HDHP (High Deductible Health Plan)

Jessica Pfisterer, Lively's VP of People, discusses why she believes working in HR involves crafting benefit plans that make life easier for employees and how her work at Lively makes that possible.

What Brought Our VP of People to Lively

Here, employers can discover how to make a HSA-qualified high deductible health plan strategy a success. Learn more.

How to Make Your HSA-qualified HDHP Strategy a Success

Lively’s expert resources have been written to help benefits brokers, employers, individuals, and employees to easily sign up for the benefits they need and have a successful open enrollment.

Resources for Open Enrollment Success

Financial Institutions

Discover the best practices for designing and implementing a successful LSA program for your employees. Get started with Lively today!

4 Best Practices for Designing an Employee Lifestyle Spending Account

Lively Partners

Why the retirement gap exists and how HSAs are crucial to helping workers set themselves up for retirement, even if they have a 401(k) or IRA.

How Can an HSA Help Bridge the Retirement Gap?

HSA (Health Savings Account)

Whether you are an HR leader, a benefits broker, or an employee, open enrollment is an important, and potentially overwhelming time of the year. HR leaders need to make sure they have their employee communications and benefits information readily available for employees, and need to plan ahead to make sure everything goes smoothly. Brokers need to be sure that their clients have the information they need about any new benefits offerings or changes, as well as educational materials that can help their clients’ employees make the best decisions for their health. And finally, individuals need to wade through a potentially overwhelming amount of information in order to make decisions that will support them and help them reach their health and financial goals over the next year. 

Lively has put together a wealth of resources to ensure that open enrollment goes smoothly no matter what your role. As open enrollment season gets underway, we wanted to take the time to round them up for you, so you can find the guidance you need during this critical, busy season.

## Guides and glossaries

__Open Enrollment Guide__
Our [open enrollment overview](https://livelyme.com/guides/open-enrollment/) for brokers, employers, and individuals that guides you through answers to the basics questions such as what it is, how to prepare, and what you need to know during and after open enrollment, with links to additional resources.

__Open Enrollment Survival Guide__
For brokers and employers, our easy-to-use [survival guide breaks down open enrollment](https://lively.foleon.com/resource/open-enrollment-faq-survival-guide/) into pre, during, post, phases. It includes key action items and commonly asked questions, as well as helpful, free downloadable checklists, to enable you to effectively maximize engagement, reduce costs, and increase employee satisfaction.

__Glossary of HSA and Health Insurance Terms__
Easy-to-understand definitions to help you, your clients, or your employees better [understand common terms related to health insurance, saving, and spending accounts](https://lively.foleon.com/resource/health-insurance-hsa-terms-glossary/) to make picking the right plan and benefits easier during open enrollment.

## Guidance for brokers and employers

__How to improve your company’s open enrollment process__
If you are struggling with employee engagement during open enrollment, this post outlines [how to prepare and set clear goals and expectations](https://livelyme.com/blog/how-to-improve-open-enrollment-process/) in order to maximize employee benefit sign up.

__A Broker’s Guide to Helping Employers During Open Enrollment__
Open enrollment is often overwhelming for your clients, especially for People and HR teams. These [five tips enable you to ease the burden on your clients](https://livelyme.com/blog/how-brokers-can-help-with-open-enrollment/) and position yourself as a valuable ally during their busiest time of year.

__What new brokers should know about open enrollment__
As a new broker, open enrollment can be a stressful time. [Learn what you need to know](https://livelyme.com/blog/5-things-new-brokers-should-know-about-open-enrollment/) to take the guesswork out of what you need to do by preparing ahead of time.

__Open enrollment preparation checklist for brokers__
These [six steps enable you to start preparing for open enrollment](https://livelyme.com/blog/open-enrollment-preparation-checklist-for-brokers/) in order to drive more business and serve existing and new clients better.

## Open enrollment questions answered

__What are the phases of the open enrollment process?__
A [step-by-step outline for employers to help streamline the open enrollment process](https://livelyme.com/blog/phases-of-the-open-enrollment-process/) and ensure your employees’ paperwork is completed as quickly as possible.

__Why do open enrollment periods exist for health insurance?__
Employees may wonder [why they can’t sign up for health insurance all year long](https://livelyme.com/blog/why-do-open-enrollment-periods-exist-for-health-insurance/). This post breaks down why you can only sign up for insurance during certain times of the year unless you have a qualifying life event. 

__How should I choose open enrollment dates for my company?__
What employers need to consider when [setting dates for open enrollment for health insurance and other workplace benefits](https://livelyme.com/blog/what-to-consider-before-choosing-open-enrollment-dates/), including late enrollment and special enrollment periods.

__How can employees and individuals prepare for open enrollment?__
These five tips [walk you through the open enrollment preparation process](https://livelyme.com/blog/five-tips-to-prepare-for-open-enrollment/), so that you can sign up for the benefits that are best for you.

__How to open an HSA during or outside of open enrollment?__
While open enrollment is a great time to open an HSA if you are signing up for a qualifying high-deductible health plan, as long as you have a qualifying health plan, you can [sign up for an HSA all year long](https://livelyme.com/blog/open-hsa-outside-open-enrollment/). 

## A trusted partner for open enrollment and beyond

If you are looking for a responsive, helpful benefits partner that offers ongoing education and industry-leading support for your clients and their employers, [reach out to Lively](https://livelyme.com/contact-sales/). Our saving and spending accounts, including HSAs, FSAs, HRAs, MTAs, and LSAs, are designed to be easy to use and support benefits adoption and use during open enrollment and beyond. 


Resources for a Successful Open Enrollment

As a financial or investment advisor, your job is to help your clients create the best financial future for themselves and maximize their savings and investments. You can guide them towards lucrative investment vehicles, advise them on where to cut expenses, and help them achieve their long term financial goals. In all the mix of your clients’ assets, one account that shouldn’t be ignored is their Health Savings Account (HSA). 

The tax advantages of an HSA, especially in retirement, make it one of the most critical savings and investment accounts a person can maintain. It can also be an account likely to be forgotten if your client changes employers or ceases to be covered by a High Deductible Health Plan (HDHP). In this post we’ll walk you through the key information financial and investment advisors need to know about HSAs and how they can use these accounts to help their clients plan and build their savings for [comfortable retirement](https://livelyme.com/blog/hsa-bridge-the-retirement-savings-gap/).

## What is an HSA?

An [HSA](https://livelyme.com/guides/hsa-guide/) is an account into which participants contribute tax-free money to pay for qualified medical expenses. Not all providers offer the full range of HSA features or enable account holders to maximize their savings. Some function strictly as savings accounts and earn minimal interest on deposits, while others allow the investment of contributions. Here are the basic attributes of the HSA that make it a financially advantageous account for clients to maintain:

- The account has a triple tax advantage. The money clients contribute is tax-free up to the [annual contribution limit](https://livelyme.com/blog/hsa-contribution-limits/), which is set each year by the IRS. When account holders contribute to their HSA with pre-tax contributions, it also lowers their taxable income. HSA account balances grow tax-free, and the money that is used to pay for qualified medical expenses is distributed tax-free as well, regardless of your age at the time of distribution. That means your clients can save up to 37% on medical expenses, depending on their tax bracket. For example, would you rather your client paid $1,000 for an MRI, or $630?
- Account balances roll over from year to year, building a balance at an average net growth of 25%. This allows your clients to use their HSA to augment their other savings strategies with one that can be used to pay for a medical expense, even in retirement. 
- HSAs begin to function like a [retirement account](https://livelyme.com/blog/hsas-for-retirement/) once the account holder reaches age 65 with one exception: qualified medical expenses remain tax-free. This is especially helpful, because an individual can expect to pay [over $150,000 on health-related expenses in retirement](https://livelyme.com/blog/retiring-how-much-you-will-actually-need-healthcare/) after what’s covered by Medicare. All other distributions from an HSA are taxed at the appropriate income tax rate, which, depending on their retirement income, could come out at a lower tax bracket than when they made the contribution. 
- Your clients own these accounts and can never lose access to their savings, regardless of whether or not they are still working with the sponsoring employer or covered by an [HDHP](https://livelyme.com/guides/hdhp/). It’s true that in order to contribute to an HSA, the account holder must be actively enrolled in an HDHP and that can be their only health insurance coverage. But if they decide to buy different coverage later, they can still use their funds to pay for qualified medical expenses, or resume contributions if they ever elect an HDHP again in the future. As long as they have a balance, those funds can be invested and working for them generating supplemental income for retirement regardless of their health coverage status.
- They can [invest their contributions](https://livelyme.com/features/invest-your-lively-hsa/), ideally growing similar to investments in a 401(k) or IRA. Not all HSA administrators allow contribution investment, and some enforce high minimums that must be achieved before investment is allowed. But, if your client has an HSA like Lively’s, with low or no minimums required, they can invest as much of their money as possible so they can build their medical nest egg faster.
- Clients can use these accounts to pay for expenses for themselves, their spouses and their tax dependents, regardless of whether they are also covered under the same HDHP as your client.

## How HSAs are an essential part of a wealth building strategy

The way HSAs function allows clients to take advantage of favorable tax rules to augment their retirement savings with an account that helps them save money on medical expenses while they build their nest egg for the future. Here’s how HSAs help clients build true wealth:

1. HSAs help clients save money now and later. Since contributions are tax-free, they can help lower clients' income tax burden now while also saving them money on the medical expenses they pay for using their contributions. Clients also save money by buying HDHP insurance coverage since the premiums for these types of plans tend to be less expensive than traditional copay plans. In addition, clients can use their HSA money to pay for medical expenses in retirement tax-free. The average couple retiring today is expected to pay an average of $315,000 in [medical expenses in retirement](https://livelyme.com/blog/retiring-how-much-you-will-actually-need-healthcare/).  The ability  to pay those tax-free is significant
2. HSAs can augment other retirement accounts when contributions are maxed out. All tax-advantaged accounts have an [IRS-imposed annual contribution limit](https://livelyme.com/blog/401k-ira-irs-retirement-contribution-limits/), so if your clients are bumping up against those ceilings and are looking for another savings vehicle (that also has tax advantages), an HSA can be a valuable option.
3. The rollover and triple-tax advantages allow clients to reap greater returns due to compound interest, especially if they can invest their contributions.
4. HSAs allow for efficient use of retirement funds. By having an HSA on hand to pay for qualified medical expenses tax-free (but doesn’t have to be used for that purpose once they reach age 65), gives clients both stability and flexibility. In addition, if clients choose to maximize their HSA contributions and pay for medical expenses out of pocket while saving their receipts, they can reimburse themselves at any point in the future, including in retirement. This enables them to invest the maximum of their HSA funds. Lively offers account holders a digital receipt storage feature, so need to worry about losing receipts. 

## Not all HSA providers offer equal benefits

When advising clients as to the right HSA to participate in, here are some of the things you should look for:

1. Fees. Just like with other retirement accounts like 401(k)s, high fees can significantly cut into clients’ savings and minimize the effect of compounding.  This hamstrings your clients’ ability to build the medical safety net they want and need. The types of fees you should be wary of are administrative or maintenance fees, investment fees, research fees, debit card fees, statement fees, and transaction fees. Not every HSA administrator charges these fees, so look for one with low to no added fees to ensure your clients are reaping the rewards of saving. Lively has no fees for individual account holders. 
2. Ability to invest. The HSA administrator should make investing their contributions simple to find, easy to understand, facilitate API funds flows, inexpensive rates, and have multiple investment options so your clients have the flexibility to choose the right investments for their personal situation.
3. Native mobile apps and online dashboards for easy account management. In order for your clients to get the most out of their HSA, they must be engaged with the account. HSA advisors that make account management easy, and dare we say, fun with clear dashboards and a mobile app, tend to have higher engagement numbers than advisors who don’t.
4. The ability for your clients to electronically roll over or transfer their HSA from a previous employer or advisor. We don’t have to tell you the benefits of having your money in one place. But HSAs are often the “[forgotten account](https://www.thinkadvisor.com/2023/02/10/the-account-people-forget-to-rollover/)” that’s left with a previous employer’s administrator while a new one is opened via a new employer. By having multiple accounts open, clients will be paying more fees for the same services, which will eat into their savings. In addition, they might not have the same investment opportunities with their old HSA administrator, or their accounts could be invested in some of the same funds, which is an inefficient use of their money. Encourage your clients to consolidate their HSAs into one place to take maximum advantage of high quality investments, low fees and the compounding effect of time plus investment growth. 
5. The ability for advisors to manage the investment assets of the account holders. If you typically manage your clients’ other investments, it could be more efficient for you (and beneficial for your clients) if you also managed the investments in their HSA. 
6. Knowledgeable, responsive customer support and tailored, easy-to-access HSA education so that clients get the most out of their accounts. Lively offers dedicated, top-rated customer service via email, phone, and live chat, as well as extensive resources so our customers get the support they need. 

As a financial or investment advisor, you should consider the [HSA a valuable tool to helping your clients achieve real wealth](https://livelyme.com/partners/). It helps them to save money today and in retirement, it provides a tax-efficient investment vehicle and allows them to augment the retirement savings accounts they’re already maxing out. For questions about how Lively’s HSA can help your clients improve their financial picture, [reach out today](https://livelyme.com/contact-sales/).


Providing a competitive benefits package can be a tall order for many employers. While “competitive benefits” has become somewhat of an industry buzzword, in my experience as a people leader, what it really comes down to is offering benefits that make life easier for your employees—and communicating that you value them and have their backs. At Lively, that mindset is at the heart of all we do. The question then comes down to the nuts and bolts of building that kind of benefits package. The administrative lift can vary based on your company’s size and budget. This may mean shopping around for benefits solutions providers or working with your benefits broker to find the providers that are the best fit for your employees’ needs. Overall, in all my years as a people leader, I’ve found what matters and has the most impact over all most is taking a people-first approach. 

## Why it matters

Whether we’re talking about a lean startup, a mid-sized growing business, or a large, established company, employees need and deserve strong benefits. The truth is that benefits make up a big part of the employee experience. If someone is experiencing an issue with their benefits, it’s usually because something significant is going on in their life. There’s a diagnosis or an upcoming surgery, for example, and that’s when they figure out there’s a hiccup with their provider or they don’t have an easy-to-use HSA.

You want everything related to benefits to be as smooth as possible in those trying times so that your employees feel cared for by the company—like their experience matters, because it does. I think every type of company can benefit from taking that view, regardless of size or industry. Benefits that work for your employees help build employee morale, loyalty, and ultimately a strong company culture. 

## Putting employees first while balancing logistics

There’s more than one way to build a robust benefits package. One option is to go with an all-in-one package, for example using the same provider for your insurance and your HSA. That can certainly make things simpler on the admin side, but it isn’t necessarily what’s best for your team. Some parts might be great, but flaws in other areas can lead to major headaches.

For example, let’s say you launch an education campaign to build awareness around high-deductible health plans and HSAs. Helping employees get enrolled is a win-win for everyone. It saves the company money and helps your employees save for the future. If the campaign goes well, it could get a lot more people on board. 

But what do you do if the HSA that came with your health insurance plan isn’t working well? Maybe it’s difficult for folks to access or manage their account, or the provider is using outdated, glitchy tech. This is a bad experience for your employees, who don’t want to be distracted by issues with their HSA.  It can also lead to more administrative work for your team answering employee questions and working on solutions, instead of focusing on other important goals. 

## What it means on the admin side

Choosing a best-in-class tool for each type of benefit makes sense if:

- You want your employees to have the best possible experience using their benefits
- You want to avoid your team being inundated with issues or questions from employees on benefits that should be easy to use
- You don’t want to have to re-evaluate these benefits often, because you know you have the best option available

It may require some upfront work on the back end to get things integrated, but it could set the stage for a much smoother experience. Often, the setup is something your customer success manager or broker will be able to take on or help you with, lightening the load for your team.  Let’s say you have two different benefits systems that frequently send information back and forth. Your benefits broker can be the person who sets this up or sends that report across for you. In that way, it may not actually be a huge lift—and it gives employees the best tools for each benefit they're using.

Choosing best in class benefits is something I’m seeing more and more among younger companies. That’s because their people teams are advocating for their employees and working to find the solution that is right for them, not only a solution that makes the people team’s life easier. This is important for employee happiness and, ultimately, retention of the team you’ve worked hard to build.

## How it affects recruitment and retention

I will say that it’s more common among traditional industries and larger companies to go with an all-in-one package for benefits, even if it isn’t the best choice for employees. Some companies just want to set it and forget it. That means one provider for all benefits, which may mean that  the HSA, or other savings and spending accounts, such as Lifestyle Spending or Medical Travel, might not be so great.

But more businesses are beginning to focus on employees. That’s a good thing because employees are getting used to having tools and systems that work for them, instead of solutions that just work for the admins. Ideally, you find solutions that provide both a great employee experience and an easy admin experience. That’s becoming the expectation now as people transition to new employers. At Lively, we want to provide resources that best serve our employees. That might mean more work behind the scenes for benefits brokers—or maybe it’s just a one-time setup or integration, and then you don’t have to worry about it again. Either way, it’s worth it to give employees the best tools.

Ready to learn more? [See how Lively can help](https://livelyme.com/employers/) your business provide the benefits your team needs.


Building a Sustainable People-First Benefits Package: Balancing Employee Benefits and Admin Lift

Americans are woefully financially underprepared for retirement. According to the National Retirement Risk Index, about [50%](https://www.forbes.com/sites/johnwasik/2023/07/10/coming-up-short-in-retirement-why-people-will-not-have-enough-money/?sh=77068c3c7da9) of working age Americans won’t be able to maintain their pre-retirement standard of living if their saving levels don’t increase. The gap between what those Americans have saved and what is estimated they will need is called the “retirement gap” and is estimated to be about [$7 trillion](https://www.bloomberg.com/opinion/articles/2022-03-28/the-u-s-retirement-crisis-is-a-financial-crisis-too?in_source=embedded-checkout-banner).

In this post, we’ll explore the reasons why the gap exists and how HSAs are crucial to helping workers set themselves up for retirement, even if they have a 401(k).

## What is the “retirement gap”?

The retirement gap is the difference between what it is estimated workers should have saved (based on their salaries and age) in order to maintain their pre-retirement lifestyle. Fidelity [recommends](https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire#:~:text=Key%20takeaways,hope%20to%20have%20in%20retirement.) that workers aim to save at least one year’s salary by the age of 30, 3 years’ salary by the age of 40, 6 years’ salary by the age of 50, 8 years’ salary by 60 and 10 years’ salary by 67. 

The amount of savings individual workers will need will depend on a wide variety of factors including, but not limited to, the lifestyle they want to lead, whether or not they own their home free-and-clear once they retire, and their healthcare needs. In fact, healthcare needs alone are expected to take up a big chunk of retirees’ savings. In fact, the average 65 year old couple retiring in 2023 can expect to pay an estimated [$315,000 in medical bills](https://www.businesswire.com/news/home/20230621969160/en/Fidelity%C2%AE-Releases-2023-Retiree-Health-Care-Cost-Estimate-For-the-First-Time-in-Nearly-a-Decade-Retirees-See-Relief-as-Estimate-Stays-Flat-Year-over-Year) over the course of their retirement. 

The recent National Retirement Risk Index found that 47% of all workers weren’t saving enough, and the households at greatest risk were those where the head of household was aged 30-39 years. The reasons are many, but most boil down to the recent economic climate, including the Great Recession and the Covid pandemic, and the fact that many people’s retirement strategy hinges on contributing to a 401(k). 

## Why 401(k)s shouldn’t be workers’ only savings vehicle

When most people hear the phrase, “retirement savings account,” they automatically think of a 401(k). That’s because the 401(k) has become the dominant retirement savings vehicle since the [1970’s](https://www.ebri.org/docs/default-source/fast-facts/ff-318-k-40year-5nov18.pdf) when the account type was created. It was [modeled after the pension](https://iconsavingsplan.com/blog/retirement-planning/why-we-need-an-alternative-to-the-401k/) and meant to provide workers that stayed at a company for a long time, a way to save for retirement. But here are some statistics on how the 401(k) is functioning in today’s work environment:

- In 2020, [40%](https://iconsavingsplan.com/blog/retirement-savings/why-dont-81-million-americans-have-a-retirement-plan/) of the workforce participated in a 401(k).
- In 2021, [68%](https://www.bls.gov/opub/ted/2021/68-percent-of-private-industry-workers-had-access-to-retirement-plans-in-2021.htm) of private industry workers had access to any retirement plan, only 51% chose to participate. 
- [$92 billion](https://iconsavingsplan.com/blog/retirement-planning/why-we-need-an-alternative-to-the-401k/) is cashed out of 401(k)s every year at job change.
- Approximately [58 million](https://www.mckinsey.com/featured-insights/sustainable-inclusive-growth/future-of-america/freelance-side-hustles-and-gigs-many-more-americans-have-become-independent-workers) Americans that are gig workers (38% of all workers) are locked out of participating in a 401(k).

The 401(k) is a great savings vehicle if the worker has access to one through their employer (especially if that employer matches contributions), and if that worker stays at their employer for many years. But once the worker leaves their employer, they lose the ability to contribute to their 401(k). Their options are:

1. They can roll their account into a new 401(k) if their new employer offers one, and their plan allows rollovers. There is sometimes a fee associated with this.
2. They can roll their account into an IRA.
3. They can cash out their balance (and pay a [hefty tax penalty](https://www.irs.gov/retirement-plans/hardships-early-withdrawals-and-loans)).
4. They can manage multiple retirement savings accounts from multiple employers. That means they’re paying fees on multiple accounts, and can be invested multiple times in the same funds.
5. They can abandon their account.

Right now, the average millennial and gen Z workers stay at a company for [2.75 years](https://www.gallup.com/workplace/231587/millennials-job-hopping-generation.aspx). In addition, 38% of all workers are considered 1099 employees and are thus ineligible to participate in a 401(k). That means a large percent of the working population needs a way to save for retirement (especially medical care in retirement) that is portable and flexible. That’s where an HSA comes in.

## Why an HSA is an essential part of every workers’ retirement savings strategy

A [Health Savings Account (HSA)](https://livelyme.com/guides/hsa-guide/) is a powerful savings tool that can be used in the present moment to pay for qualified medical expenses and to save for the future. Here are the HSA basics:

- Contributions made to HSAs receive a triple-tax advantage from the IRS. They are tax-free the year they’re made, they grow tax-free and when they’re used to pay for [qualified medical expenses](https://livelyme.com/whats-eligible/), those distributions are tax-free as well (even in retirement).
- The only requirements for contributing to an HSA are: participants are covered by a [High Deductible Health Plan (HDHP)](https://livelyme.com/guides/hdhp/), they are 18, they are not considered a dependent on someone else’s tax returns, and they are not enrolled in Medicare. That means 1099 workers are free to use this account to save.
- The HSA balance rolls over from year-to-year enabling account holders to build a medical safety net.
- Account holders own their accounts so they never lose access to their HSA, even when they leave their employer. They can also use their savings to pay for qualified medical expenses once they’re no longer covered by an HDHP. However, they must be covered by an HDHP, and that must be their only insurance coverage, in order to contribute to their account.
- Once participants reach age 65, the HSA converts to a traditional [retirement account](https://livelyme.com/blog/hsas-for-retirement/) in that savings can be used for everyday expenses. Qualified medical expenses remain tax-free and everything else is taxed at the appropriate income tax rate.
- [Contributions can be invested](https://livelyme.com/features/invest-your-lively-hsa/), allowing participants to grow their account balances at the rate of the market.

If workers have access to and are participating in another form of retirement savings account(s), an HSA can help augment those accounts by providing them a tax-free way to pay for medical expenses in retirement, as well as giving them another tax-advantaged savings vehicle if workers are bumping up against their [annual retirement contribution limit](https://livelyme.com/blog/401k-ira-irs-retirement-contribution-limits/). In addition, HSAs give workers that don’t have access to a 401(k) a way to save for retirement. 

An HSA can be a powerful savings tool and should be a part of every worker’s retirement savings strategy. If you have questions about how Lively can help you, your employees or your clients to save for retirement (as well as on qualified medical expenses), [reach out to us today](https://livelyme.com/).

How HSAs can Help Americans Bridge the $7 Trillion Retirement Savings Gap

HSAs are a great employee benefit. They also have some nice perks for employers, like helping them attract and retain top talent—all while reducing healthcare costs. The challenge for HR leaders and benefits professionals often lies in finding the right HSA provider. 

I’ve worked in the employee benefits space for a long time and love being Lively’s VP of People. That’s because we’re a benefits solutions provider that genuinely wants to make it easier for employers and individuals to manage their HSAs. It goes hand in hand with our mission of helping people embrace a healthy future. Here are a few important things to look for in an [HSA provider](https://livelyme.com/).

## A smooth rollout

Launching an [HSA program](https://livelyme.com/guides/hsa-guide/) can be a tall order. The right benefits solution provider is one that can help streamline the process. It’s probably wise to launch an HSA education campaign beforehand so that your [employees understand how it all works](https://livelyme.com/blog/employee-hsa-adoption/). That includes the advantages that HSAs bring to the table, as well as the logistics of signing up. It’s an important piece that’s often overlooked when new benefits are being implemented. 

Beyond that, you want an HSA provider that has a reliable, easy-to-use product. If not, your internal benefits team will likely be flooded with employee questions and concerns, which can eat into their time and focus. In a past role before [I came to Lively](https://livelyme.com/blog/meet-our-vp-of-people/), I had an experience where an HSA program was rolled out and then didn’t work properly. Employees had issues with everything from checking their balances to using their HSA cards. My team had to work overtime to [find a new HSA provider](https://livelyme.com/resources/employer-hsa-selection-guide/) that could meet our needs. 

## Tech solutions that make life easier

Technology is ever evolving, but not all HSA providers are keeping up. The industry has a reputation for antiquated tech and outdated systems. One of the reasons Lively was founded was to make HSAs, and benefits solutions, straightforward to access and use, and an important way to do this was to bring the technology that powers them into the 21st century. Our easy-to-use platform is all about keeping things simple. It’s a user-centered experience that includes paperless onboarding and a top-rated mobile app. In other words, it’s a modern way to manage your HSA.

The thing with employee benefits is that after [enrollment](https://livelyme.com/guides/open-enrollment/), you shouldn’t be hearing about them from your employees all that much. It means they’re going about their lives and using their benefits without any issues. But if your HSA provider has glitchy tech or a cumbersome platform, you can bet that it’s going to cause disruptions for your employees and for your People/HR team.

## Customer service you can count on

Your HSA provider shouldn’t leave you flying blind. Whether it’s an employee trying to get in touch to ask a question or the employer trying to troubleshoot an issue, connecting with your provider should be easy. Not only that—they should be ready and able to provide support. With regard to the not-so-great HSA rollout I experienced a while back, poor customer service was perhaps the biggest hurdle. Employees were coming to my team in droves complaining about their inability to get any real help from the HSA side. 

This was especially frustrating because we’d worked hard to educate folks about HSAs and get them enrolled. Now here they were struggling. If people have an issue, they should be able to get the answers they need, whether that’s through self-service on the platform or website or calling member support. It’s so important to have that good customer service, and that's something I'm really proud of here at Lively. All employers, no matter what size, have access to a dedicated Customer Support Team. We’re here to walk you through whatever you need. That includes everything from general questions to specific issues, big and small, for both the employers and account holders that work with us.

## Affordable pricing

Including an HSA in your employee benefits package shouldn’t break the bank. At Lively, you can expect clear, transparent pricing. That means no hidden fees or tricky cost structures. We charge a flat rate per employee, per month. Since Lively started, we’ve saved our account owners over $8 million in fees, which I’m really proud of. So, when comparing HSA providers, be on the lookout for unclear pricing or excessive or hidden fees. They’re probably red flags. 

If you’re booking to partner with a benefits solutions provider who’ll have your back, [reach out to Lively](https://livelyme.com/contact-sales/) today.


What to Look for in an HSA Provider—and Why You Should Switch

For financial institutions that are looking for new revenue streams or ways to reach new customers, and retain existing ones (both commercial and retail), offering a Health Savings Account (HSA) can be a crucial piece of your business strategy. HSAs, and their corresponding High Deductible Health Plans (HDHPs) are fast becoming the most popular way U.S. workers and employers alike can save on health insurance costs while simultaneously improving employees’ financial health. 

In fact, over [55% of private sector workers](https://www.valuepenguin.com/high-deductible-health-plan-study) are enrolled in an employer-sponsored HDHP. But only [24% also participated](https://www.kff.org/report-section/ehbs-2022-section-8-high-deductible-health-plans-with-savings-option/#:~:text=ENROLLMENT%20IN%20HDHP%2FHRAS%20AND%20HSA%2DQUALIFIED%20HDHPS&text=Enrollment%20in%20HDHP%2FSOs%20has,HSA%2Dqualified%20HDHPs%20in%202022.) in an HSA alongside their HDHP plan. This presents a big opportunity for banks to step in and offer an HSA product that will help current and potential clients save for healthcare expenses and even retirement. In fact, after age 65, HSA account holders can continue to withdraw money from their account tax-free for qualified healthcare expenses and on any other type of expenses at their current tax-rate. 

But not all HSA providers are the same and thus they won’t extend the same benefits to businesses and their employees, or the financial institutions that offer them. Offering an HSA product can take time and precious resources from other projects, so if financial institutions want their product to bring the most value to the bank, they’ll need a partner that can do much of the heavy lifting when it comes to plan administration, onboarding, customer service, and more. 

## What are your options when offering an HSA?

Whether you’re looking to offer an HSA product for the first time, or offer a better HSA product than you do currently, consider the best practices below to help guide you in selecting the right HSA partner.

When offering an HSA, financial institutions have four general options:  

1. __An in-house demand deposit account.__ Building and maintaining an in-house HSA takes a lot of time and resources (especially to do it right) and usually results in a non-competitive product that functions more like a checking account than a dynamic savings and investment account. It lacks the capabilities required to be competitive like claims integration, digital receipt storage, engaging education, employer platform functionality, and APIs for payroll and benefit administration integration. It further requires a dedicated team of customer service employees, compliance officers who can offer deep industry knowledge and guidance around federal HSA guidelines, and operational oversight on a daily basis, all of which adds to the overhead stripping away any potential for profit.
2. __Software Purchase.__ You can buy a ready-made HSA solution with existing technology platforms. However, they can be incredibly expensive and offer no opportunity to hold deposits, keep interchange, obtain customer data, or generate revenue. These platforms are not customized or branded to your institution and come with additional requirements to staff a team, including sales and customer service representatives, to manage these solutions internally, which adds to the overhead expense.  
3. __Selling your book of business.__ You can outsource your HSA product and in doing so, sell your book of business, along with its deposits and revenue potentials, to another financial institution that is offering a more modern HSA product and may also cross sell other financial products that you already offer.
4. __Partner with an HSA provider to offer a cobranded product with a personalized approach and a cohesive customer experience.__ You’re looking for a partner with a proven track record of existing banking relationships for reference, engaged account holders and employer groups, and a platform that both fully integrates with your current systems and can be branded to the bank. 

Of these options, a true partnership solution is the most advantageous. It will remove all of the overhead within the bank on the HSA product, from tax reporting to operations to compliance. In addition, it will not only provide marketing collateral and distribution assistance, but will help your internal commercial teams close HSA sales and drive net-new customers into the bank to build new relationships. 

A true partnership can, and should, offer an HSA product that allows you to retain all of the core deposits, interchange revenue, and fee revenue while having access to all customer data for relationship building and cross-sales. The best HSA partnerships should allow your institution to offer a competitive solution for market differentiation, customer acquisition, deposit growth, and revenue with minimal lift on the bank itself.

## Not all providers are created equal - how to find the right fit for your institution

For a successful HSA partnership that ensures you will maximize the benefit of offering an HSA, look for an HSA administrator that offers a partnership model. That means the financial institution serves as the custodian for the HSA accounts and enjoys the benefits of co-branded cards and web portal experience, while the HSA administrator handles plan administration, customer education, onboarding, customer service, compliance maintenance, sales and marketing support and more. 

In order to implement, sustain, and grow an HSA offering, financial institutions need to look for an HSA partner that exhibits these characteristics:

- Allow you to hold the deposits and keep the interchange, spread, and fee revenue.
- Easily integrate into your current systems infrastructure.
- Help you build a plan to achieve strategic goals and objectives each year, including clear and actionable reporting features and an easy-to-use dashboard for online account management.
- Include comprehensive customer support, onboarding, and extensive resources for internal staff as well as customers, including compliance help and communications when regulatory changes affect HSAs.
- Offer transparent pricing so that you understand the true cost of offering the product, both to the bank and the customer. Make sure to ask for the fee schedule. It should include the fees that will be charged, when they will be charged and ways to avoid being charged fees.
- Enable you to expand relationships with existing customers and provide enablement resources to help sell the HSA. 
- Offer advanced technology including analytics, AI, and machine learning to help you run reports, spot and react to trends, solve problems and develop new products.
- Have strong market intelligence and understand how your HSA competes against both local institutions and “big banks.”

For your customers, both commercial and retail, look for an HSA partner that offers: 

- An easy-to-use platform that helps users easily understand their account balance, saving, and spending. 
- At least one investment option (Lively has two that cater to different comfort levels with investing).
- Data integration with other business units including customers’ HR information systems, payroll, benefits administration, etc. 
- Account holder and client education to enable you to empower customers with the relevant information to effectively use their accounts to meet their unique financial goals.

## Lively HSA: A different kind of partnership

With a [Lively partnership](https://engage.livelyme.com/fi-contact-us), you are the custodian of your HSAs. You hold the deposits, collect fee income, and we take care of the rest. We handle risk mitigation and compliance support, plan administration including onboarding, customer support, account management, internal partner enablement and staff education.

We price our partnership solution so that financial institutions get the greatest ROI on their HSA. Our fee schedules are clear, transparent, and include no hidden fees.

[Our HSA](https://livelyme.com/partners/) is also a top-rated product that has been expressly designed with the user at the top of mind. It includes a mobile app, account holder and employer dashboards for easy account management, two different investment accounts as well as a savings account option, debit cards and unparalleled customer service for both employers and account holders. We also offer co-branded sales enablement materials and knowledgeable sales professionals to help you expand relationships and close deals.

HSAs are long-term, portable accounts that allow financial institutions to establish lifelong relationships with their customers. Given the rise in the cost of medical care year-over-year, as well as the retirement savings gap in the U.S., HSAs are not just another way to save money. They can be an integral piece to the financial wellness puzzle for current and potential customers, enabling them to save for healthcare costs today and in retirement. Offering an HSA product now, establishes your financial institution as an essential partner to them and the generations of savers that come after them. HSAs are the future of financial wellness, now is the time to get on board. 

If you'd like to discuss how a Lively partnership could benefit your business, [reach out today](https://engage.livelyme.com/fi-contact-us).


If you’ve decided to implement a [High Deductible Health Plan (HDHP)](https://livelyme.com/guides/hdhp/) as part of your benefits package, congratulations. These plans can help companies lower their benefits spend as well as increase employee satisfaction with company benefits offerings (which can increase their [satisfaction in their job](https://www.pewresearch.org/social-trends/2023/03/30/how-americans-view-their-jobs/)). But in order for the implementation strategy of your HDHP to be successful, you need to ensure employees adopt it. 

Here are the four necessary steps to ensuring implementation success: 

- Offer a [Health Savings Account (HSA)](https://livelyme.com/guides/hsa-guide/) with your HDHP
- [Educate your employees](https://livelyme.com/blog/employee-hsa-adoption/) as to the benefits of participating in this type of health insurance and savings account
- Commit to making an employer contribution to employees’ accounts (and get employees to commit to contributing as well)
- Make sure your HSA has built-in flexibility

We’ll go into the details below.

## 1. Offer a Health Savings Account

While HDHPs typically have the lowest monthly premiums of all the traditional group health insurance options, they also tend to have the highest deductible. The minimum deductibles for these types of plans are set each year by the IRS and adjusted annually for inflation. Higher deductibles can make employees hesitant to sign up for an HDHP, even though preventative care is 100% covered regardless of whether or not the plan participant has met their deductible. That’s where an HSA comes in.

HSAs are the corresponding benefit to HDHPs. Plan participants can only sign up for an HSA and contribute to this account while they are actively enrolled in an HDHP (as long as it’s their only health insurance coverage). These accounts were formed as a way for HDHP participants to save for their deductibles and other health care costs tax-free. Their savings grow tax-free and whatever they spend on qualified medical expenses is tax-free as well (this is known as the triple tax advantage of HSAs). Employees own these accounts so their contributions never expire and roll over from year-to-year, enabling them to build a health safety net. And when employees retire, they still get to keep their HSA, only it begins to function as a traditional retirement account. That means employees can use their contributions on whatever they want, paying no income tax on distributions for qualified medical expenses and the appropriate income tax rate on everything else.

These attributes of an HSA can help ensure your implementation of your HDHP will be a success:

- Increased adoption of your HDHP because now they have a [tax-advantaged way to save](https://livelyme.com/hsa-savings-calculator/) for their deductible. 
- Increased engagement with the HDHP because now they have a tax-free way to save and pay for out-of-pocket medical expenses.
- Increased employee satisfaction with company benefits because HSAs are a [highly popular benefit](https://www.hrmorning.com/articles/the-difference-between-fsas-and-hsas/) on their own.
- [Increased cost savings](https://livelyme.com/payroll-tax-savings/) because the more employees that sign up for your HDHP, the lower your monthly premium cost. In addition, the money employees contribute to their HSA is taken out prior to their income tax assessment, which can lower your FICA responsibility.  

## 2. Educate employees on the benefits

In order for employees to get the most out of their benefits, they have to know what’s available and how to use it. If this is the first time your company is offering an HDHP with an HSA, there’s a chance your employees aren’t familiar with this type of benefit. So make sure you create clear communication collateral for open enrollment that highlights attributes of an HDHP/HSA combination and how it can benefit your employees. 

Once employees have signed up for this plan, distribute ongoing education pieces throughout the year, reminding employees how much they can save, what they can use their HSA for, and more. Here are some of the high points your communications should touch on:

- They must be enrolled in an HDHP (and it must be their only health insurance) in order to contribute to an HSA.
- 100% of a long list of [preventative care](https://www.hhs.gov/healthcare/about-the-aca/preventive-care/index.html#:~:text=Blood%20pressure%2C%20diabetes%2C%20and%20cholesterol,baby%20and%20well%2Dchild%20visits) is covered prior to the deductible being met.
- HSA contributions are tax-free in the year they’re made, they grow tax free and distributions made for qualified medical expenses are tax-free as well.
- The [annual contribution limit](https://livelyme.com/blog/hsa-contribution-limits/) for individual and family plans (which are set by the IRS each year) and an additional $1,000 catch-up for anyone 55 or older.
- How much the company will be contributing (either matching or a flat contribution) to each employee’s account.
- Employees can choose to keep their contributions in a savings account or [invest them in the marketplace](https://livelyme.com/blog/can-i-invest-my-hsa-money/) (as long as your HSA administrator provides this service), which can empower them to grow their savings at an even faster rate.
- They can adjust their HSA contributions at any time.
- They own their contributions, so even if they lose the ability to contribute to their account because they are no longer covered by an HDHP, they can still use their previously contributed money for out-of-pocket medical expenses.
- Any pertinent information employees need to know about onboarding and accessing their account.

## 3. Commit to an employer contribution

Committing to a contribution takes two steps. First, as an employer, you should consider whether or not you want to contribute to employees’ HSAs. Studies show that employees are [more likely to contribute](https://www.alegeus.com/insights/employer-contributions-to-hsas-improve-the-employee-healthcare-experience/#:~:text=Employer%20contributions%20also%20influence%20how,balance%20goes%20up%20to%20%242%2C132.) to HSAs (and to contribute more) when their employers also make a contribution to their account. So if it’s in your employee benefits budget, it’s worth considering offering an employee contribution match or a flat annual sum for each employee’s HSA. 

In addition, as part of your ongoing employee communication, you can remind employees to treat their HSA contribution goal as a financial goal. Encourage them to “commit to contributing” every month or set up automatic contributions. This can help keep employees engaged with the HSA and remind them of the benefits of saving, at times when it could be tempting to divert the money they’re contributing to other areas. If possible, work with a provider that enables employees to contribute directly from their paychecks, pre-tax, in order to make contributing as easy and beneficial as possible. 

By encouraging employees to contribute as much as they can to their HSA, you could increase their engagement with the account, as well as your FICA cost savings and you could increase employee satisfaction with the benefit (every time they see their account balance has gone up, they will get a little [hit of dopamine](https://www.usbank.com/financialiq/manage-your-household/personal-finance/how-having-savings-gives-peace-of-mind.html)). 

## 4. Allow for flexibility

One of the most attractive attributes of an HSA is its inherent flexibility in design. Your HSA should be able to work for any employee at all times. That means you should build these features into your plan design and communicate said features in your [employee education](https://livelyme.com/blog/employee-hsa-adoption/) pieces:

- Employees should be able to increase, decrease or pause their contributions at any time.
- They should be allowed to invest their contributions (and as much of their contributions as they want), so look for an HSA provider like Lively that has this capability.
- Employees should be given a debit card for point-of-sale purchases.
- The HSA provider should offer an app for account management on-the-go.
- There should not be a time limit for reimbursements as long as the expenses were incurred after the HSA was active. 

To help your employee education, we've compiled the more [frequently asked questions that employers get asked about HSAs](https://livelyme.com/guides/top-hsa-questions/) so you are equipped to provide your employees with comprehensive answers. 

## How Lively can help

Lively is your partner in creating the most comprehensive benefits package for your budget. We offer best-in-class UX design and customer service and our [HSA beats the industry average](https://livelyme.com/blog/hsa-snapshot-report/) for contributions every year. If you’re ready to level-up your benefits offerings, [reach out today](https://livelyme.com/contact-sales/).


Ways You Can Implement a Successful High Deductible Health Plan Strategy

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](https://business.bofa.com/content/dam/flagship/workplace-benefits/id20_0901/documents/2022-WBR.pdf). 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](https://livelyme.com/guides/top-hsa-questions/) 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](https://livelyme.com/guides/hdhp/) and how they work with HSAs
- How to [enroll in an HSA](https://secure.livelyme.com/signup/start?_ga=2.241872133.662509266.1690813854-921911386.1667409125) 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](https://livelyme.com/blog/can-i-invest-my-hsa-money/)
- Avoid paying taxes on withdrawals that are used for [qualified medical expenses](https://livelyme.com/whats-eligible/)
- Use HSA funds as taxable [retirement income](https://livelyme.com/blog/hsas-and-retirement-what-you-need-to-know/) 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](https://business.bofa.com/content/dam/flagship/workplace-benefits/id20_0901/documents/2022-WBR.pdf) 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](https://livelyme.com/contact-sales/) to bring your benefits package to the next level.


How the Fastest-Growing HSA Provider Gets Their Employees to Adopt HSAs

Every so often external forces require an industry to change. Presently, the headwinds of inflation, higher interest rates, macroeconomic volatility, a [precipitous drop off](https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/five-ways-to-drive-experience-led-growth-in-banking) in mortgage originations and shifting customer practices are bearing down on financial institutions. According to a recent [report](https://www.mckinsey.com/industries/financial-services/our-insights/firing-on-all-cylinders-in-north-american-commercial-banking) from McKinsey, bank profits reached a 14-year high in 2022, but only 35% of banks globally saw returns above the cost of capital. To weather the current environment, financial institutions need to reevaluate the way they’re doing business. 

This includes reimagining their customer journeys by offering new products that bring cross-selling opportunities, partnering with their commercial customers to help them better operate their businesses, providing a modern, digitized customer experience and comprehensive support. Partnering with a commercially competitive [Health Savings Account (HSA) provider](https://livelyme.com/), especially one that meets and exceeds customers’ expectations for ease of use, can help financial institutions achieve these goals. 

## How HSAs help financial institutions meet the current moment

Customers, both commercial and retail, want to see something new from their current financial relationships. They want services to be simple, intuitive, digitized, and all in one place. They want personal, human, and responsive customer service, not a call center or chat bot, and they want a true partner in operations. They want built-in education to help account holders understand what an HSA is, how it works, and what they need to do to get the most out of the product. They want many of the things as business owners that they expect as a retail customer. In fact, the lines between retail and commercial customers are often blurred since [90%](https://www.bai.org/banking-strategies/attract-small-businesses-with-a-holistic-banking-experience/) of small business owners keep their personal account at the same bank as their business account. 

One way financial institutions can better retain, engage, and increase commercial business and win a larger share of their wallet is by offering a tech-forward HSA.  

HSAs provide businesses of all sizes with many advantages. These include: 

- __HSAs help businesses cut costs.__ Supply chain issues and inflationary pressure have many organizations looking to reduce their expenditures, and the cost of employing workers is right at the top of that list. A [majority of employers](https://www.axios.com/2022/09/19/employer-health-costs-premiums-workers) expect that these costs will continue rising and the trend of high prices will persist. HSAs are paired with [High Deductible Health Plans (HDHPs)](https://livelyme.com/guides/hdhp/), which typically have the lowest annual premiums of the traditional health insurance options. The high deductible can give employees pause, but when paired with an HSA, the account provides an incentive for employees to choose the more affordable health insurance plan. That’s because HSAs give workers a way to save for the higher deductible tax-free. By giving employers a solution to increase adoption of their HDHP, financial institutions can help them lower the cost of employment, which helps them attract and retain top talent, while reducing operational costs.  
- __Providing an enterprise-level HSA solution with automated functions like enrollment or payroll contributions can help finance and HR teams save time, reduce errors, and ensure a better employee experience.__ Many small and medium sized businesses have lean finance and HR departments. That means they need an easy way to manage their everyday operations. By offering an HSA through the same financial institution they already bank with, it reduces the vendors with which they have to interact and can help solidify customer loyalty.
- __HSAs help businesses recruit and retain talent.__ Many small and medium-sized businesses have a difficult time competing with larger organizations for talent. In addition, employers of all sizes are working hard to retain talent, as losing employees means a loss of productivity, intellectual capital, and can cost more than half an employee’s salary to replace them. But by offering an engaging, tech-forward HSA that offers features like investment options and account holder education, businesses can differentiate themselves in the labor market.

Offering an HSA also provides many advantages to financial institutions, especially for commercial customers. These include: 

- __They provide financial institutions with a pathway for cross-selling.__ If you offer an HSA to employees that are not current customers, and you perform well, you establish a positive relationship and have the opportunity to woo them from their current banking relationship. If you’re unsure how large of a demographic these customers represent, according to a recent [study](https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/five-ways-to-drive-experience-led-growth-in-banking) by McKinsey, people are currently 2x more likely to open a new account than they were in the past, 15% are open to a new banking relationship and 20% are considering switching their banking relationships. In addition, [BAI ](https://www.bai.org/banking-strategies/attract-small-businesses-with-a-holistic-banking-experience/)found that half of the small businesses they surveyed at the end of 2022 expected to change their financial services relationship in the next two years. 
- __HSAs give financial institutions a new revenue stream that can increase the overall lifetime value of each customer.__ Banks and other financial institutions can earn revenue through net interest margin, interchange and employer administrative fees.

## Why your commercial customers already want an HSA

Selling an HSA to your current customers won’t be a difficult task because [more than half](https://www.benefitspro.com/2023/02/20/hdhp-enrollment-reaches-more-than-50-of-american-private-sector-workers/?slreturn=20230614181815#:~:text=A%20record%2Dhigh%20number,2021%2C%20an%2083.7%25%20increase.) of Americans are already enrolled in an HDHP and are looking for ways to cut down on healthcare costs. These types of plans are growing in popularity because they offer the lowest monthly premiums and the greatest flexibility in terms of where employees spend their healthcare dollars. 

Offering an HSA alongside an HDHP is essential to both securing employees’ adoption of the health insurance plan, but also in financially supporting their physical and financial health. That’s why a majority of HSAs are sourced through an employer.

In fact, [over 55% of US employers offer an HDHP](https://www.valuepenguin.com/high-deductible-health-plan-study), so many of your customers are looking for an HSA for the first time, or they’re looking for a better one. Offering your customers a competitive HSA not only strengthens your relationship and opens the door to cross selling new products, but keeps the deposits, net interest margin, and fee revenue gained from HSAs from going to a competitor. 

## Why commercial customers need an alternative to traditional HSAs 

Most HSAs offered by banks are focused on the individual account holder and aren’t equipped with an employer platform that enables administration of, and insight into, the plan. Without an employer dashboard that can run custom reports, APIs for benefits administration integration and payroll integration, census management, contribution management, education, and transparency, you won't be set up to serve and grow with your commercial customers. Because the majority of HSAs are sourced through employers, you want to make sure you are set up to serve their needs to offer the most competitive HSA and ensure it is easy for employers to administer and manage, as well as simple for employees to use. 

Most traditional HSAs, including those offered by many financial institutions, are not equipped with built-in education that enables HR professionals to help their employees to get the most out of an HSA. While HSAs have existed for 20 years, many people confuse them with other tax-advantaged accounts like FSAs or HRAs. They also don’t understand that HSAs are designed for long term savings, causing them to ultimately miss out on the benefits these accounts provide from both a cost savings and financial planning perspective. Working with a provider that provides educational materials for HR administrators and account holders and folds education into the product experience can make a key difference in levels of account participation, ultimately driving higher levels of HSA deposits.  

## Partner with a forward-thinking HSA provider for success

Lively’s HSA is a best-in-class product that was built specifically with both employers and account holders in mind. Employers can easily manage and administer their plan from the employer platform, which provides an expressly designed dashboard, task automation, and clear and insightful reporting. Lively takes care of all account onboarding and employee communication, taking much of the administrative load off of business owners, and offers highly responsive, knowledgeable and personal customer service accessible via phone, email, and chat so issues are resolved immediately. 

When a financial institution leverages [Lively's HSA partner solution](https://engage.livelyme.com/fi-contact-us), they're not solely responsible for sales, administration or service. Lively’s technology seamlessly manages account set-up, administration, record keeping and service. In addition, Lively's sales enablement and customer success team help financial institutions efficiently grow and retain commercial HSA customers.

By offering a competitive product that meets the diverse needs which are currently top-of-mind for your commercial customers (and their customers, i.e. their employees), financial institutions can attract more high quality commercial customers, boost retention, and increase their revenue. An HSA product enables you to deepen a current relationship or initiate a new one, and cross sell other products to them and their employees in the future. 

If you'd like to learn more about how we can help offer a modern HSA and gain and retain commercial customers, [reach out to us today](https://engage.livelyme.com/fi-contact-us).


Why HSAs are a Powerful Tool for Financial Institutions to Gain and Retain Commercial Customers

Human resources is about more than just choosing the most cost-effective employee benefits. It’s about crafting benefits plans that make life easier for employees. It’s a way to show employees that they’re seen and valued, and that their employer is investing in them. That can go a long way when it comes to recruitment and retention. 

That outlook is part of what drew me to Lively almost four years ago. I wanted the opportunity to use human resources in a way that serves employees and makes financial sense for growing companies. When done right, it can allow businesses to direct more resources toward operations and growth—without sacrificing employee satisfaction and well-being. On the contrary, it can boost employee wellness. As Lively’s VP of People, I can tell you that this is a driving force in all we do.

## Why I came to Lively

I learned about Lively thanks to a bit of happenstance. I came across a message on an HR list-serve sharing that Lively was looking for their first HR hire. I was running the people team for a hiring and onboarding platform at the time and got curious about what Lively was all about. Professional benefits had been in my wheelhouse for a long time, and HSAs had been a real pain point in my experience. At my previous company, we actually had to change our HSA provider midyear because employees were so unhappy. And then there was Lively, dedicated to making all of that easier. That caught my attention. 

Once I met with the co-founders, it became clear that we all [shared the same values](https://livelyme.com/blog/lively-core-values/). It was really important to them to invest in people—and that’s the number one thing for me in my career that makes my job more enjoyable. Having leadership that’s eager to make that investment is huge. It isn’t uncommon for companies to be more reactive, investing in people only after it becomes clear that they need to. In my experience, investing in people teams early is what makes the biggest difference. I knew that Lively was a place where I could help make that investment pay off.

## The importance of educating employees about HSAs

We’re a little bit spoiled here at Lively because HSAs are wrapped into employee onboarding training. It covers what HSAs are, how they work, and how to enroll in one. It’s a lighter lift for my team in terms of educating our employee base, but that isn’t the case at all companies. In the past, I’ve been tasked with helping employees better understand high-deductible health plans and how they work with HSAs. That might necessitate a comprehensive education campaign around:

- What constitutes a [high-deductible health plan (HDHP)](https://livelyme.com/guides/hdhp/)
- [How HSAs work](https://livelyme.com/guides/hsa-guide/) hand in hand with HDHPs
- The [benefits of an HSA](https://livelyme.com/guides/top-hsa-questions/), including the tax perks and the ability to use it as a retirement account once you turn 65

It’s also worth noting that premiums for HDHPs are typically lower when compared to plans that have a low deductible. Some employers will actually cover the cost of premiums to encourage HDHP enrollment. They also have the option of contributing to employee HSAs. Lively does both of these things, which are incredible employee benefits. It’s another reason I wanted to be part of this team. 

## Living our values

I’m not someone who wants to just come to work, collect a paycheck, and go home. I want to feel like I’m doing something that matters. The U.S. healthcare system has no shortage of problems. Helping to make HSAs more accessible is a small but powerful thing that can have a big impact on employee wellness. Lively doesn’t just talk a big game—we’re out there following through and [living our mission](https://livelyme.com/blog/customer-centric-approach/), which is to inspire people to confidently embrace a healthy future. 

[Reach out today](https://livelyme.com/careers/) to learn more about joining the Lively team.


Your company probably spent a great deal of time and effort choosing the right mix of benefits to offer your employees. In return for that time and effort (and the money the company will spend on premiums and other administrative costs), you as the employer are probably expecting to receive cost savings, higher retention, and more effective recruitment, as well as healthier, happier and more engaged employees. As you should. But in order for you to get that return on your benefits’ investment, you need as many employees to participate in said benefits as possible.

In this post we’ll discuss how to get as many eligible employees to adopt (i.e enrolled in) your HSA, as well as how to keep them engaged with the benefit. It comes down to: letting them know how to become eligible for an HSA, the benefits of signing up for one, depositing employer contributions into employees’ accounts, and ensuring they have the option to invest their money. 

Let’s get started.

## 1. Explain eligibility criteria

Even if this isn’t the first time you’re offering an HSA to your employees, they might not know how to qualify to participate. So before, during, and after [open enrollment](https://livelyme.com/guides/open-enrollment/), you want to make sure you communicate the basics. Anyone who meets the requirements to participate in company benefits, can participate in an HSA as long as they also meet these eligibility requirements: 

- They are actively enrolled in a [High Deductible Health Plan (HDHP)](https://livelyme.com/guides/hdhp/) and it’s their only health insurance coverage. 
- They can’t be considered a dependent on someone else’s tax returns.
- They're 18 or older and not enrolled in Medicare (Part A and Part B) or Medicaid.
- They don’t have or use a [General Purpose FSA (Flexible Spending Account)](https://livelyme.com/guides/flexible-spending-account-fsa/). But, employees are allowed to have a Limited Purpose FSA for dental, vision, or a Dependent Care FSA. Note: An employee can have an existing HSA and open an FSA. Their HSA funds will remain, but they cannot continue contributing to the health savings account.

You’ll also want to be sure to communicate that even if their spouse or dependents aren’t covered by the employer-sponsored HDHP, the employee can still use their HSA contributions to pay for [qualified medical expenses](https://livelyme.com/whats-eligible/) for these family members. Their only limited in how much they can contribute annually by the type of HDHP they have, which are determined by the IRS and adjusted annually for inflation. 

Sometimes the only hurdle employees have to signing up for a new benefit is knowing that they can. By clearly explaining the eligibility requirements during [open enrollment](https://livelyme.com/guides/open-enrollment/), you can increase your employees’ adoption of your HSA with minimal effort.

## 2. Discuss the main advantages

Another way to increase employees’ adoption of and engagement with your HSA, is to make sure they’re clear on the benefits of participating in this type of account. You should develop communication collateral that both hits the high points and separate pieces that dig deep into the benefits of each attribute HSAs have. 

To keep your employees engaged with their HSA throughout the year, you’ll want to regularly release seasonally appropriate communication collateral that reminds employees of how their HSA can help meet their current medical expense needs.

Here are some of the benefits you should highlight:

1. HSAs rollover from year-to-year. Unlike other medical spending accounts, employees own their HSAs and all of the contributions made to them (including their employer’s contributions). Because of this, their account balance rolls over from year-to-year, enabling them to build a health safety net for that medical rainy day we all inevitably have. 
2. HSAs are portable. Another way account ownership benefits employees is that they never lose access to their HSA– even if they leave the company. Also, if they cease to be covered by an HDHP, they can still use their previously contributed money on qualified medical expenses.
3. HSAs come with a triple tax advantage. The money employees contribute is tax-free the year it’s made, it grows tax-free and distributions that are made for qualified medical expenses are tax-free as well. That means employees could end up saving up to 37% on their out-of-pocket medical costs, depending on their tax bracket.
4. [HSAs can act as a supplemental retirement savings account](https://livelyme.com/blog/hsas-for-retirement/). Since HSAs rollover from year-to-year, employees have the chance to build their savings over time. Once they turn 65, their account starts to act like a typical retirement account except for one caveat: distributions for qualified medical expenses remain tax-free. All other expenses are taxed at the appropriate income tax rate. Since the average 65 year-old couple retiring today can expect to pay more than $400,000 in healthcare costs in retirement (which doesn’t include long-term care, which could be as much as $100,000 a year), a retirement account that enables tax-free medical spending would be a very helpful asset.
5. They have the [ability to invest their HSA contributions](https://livelyme.com/blog/can-i-invest-my-hsa-money/). Some HSA administrators allow participants to invest a portion or all of their contributions. This allows their money to grow at the rate of the market.
6. Under an HDHP, preventative care is covered 100% prior to the deductible being met. This could help alleviate any hesitation employees feel with signing up for a high deductible plan. 

If you need help answering employees questions about the benefits of HSAs and the basics of how they work, Lively has compiled the [top HSA questions](https://livelyme.com/guides/top-hsa-questions/) and their answers, so you can easily have information at your fingertips. 

## 3. Make employer contributions

The more employees contribute to their HSAs, the more engaged they become and the more money you save on FICA taxes. So if you really want to encourage employees to keep contributing to their account and to contribute more, consider implementing employer contributions.

According to Devenir’s most recent [HSA report](https://www.devenir.com/wp-content/uploads/2022-Midyear-Devenir-HSA-Research-Report-Executive-Summary.pdf), 33% of all HSA accounts received employer contributions. The average employer contribution was $869 and the average employee contribution was $2,147. If only 33% of accounts received employer contributions, there’s still room in the employment market to stand out by being an employer that offers this. By contributing to employees’ accounts, you not only show current and prospective employees that you care about their health and wellbeing (which can help improve retention and recruitment efforts), you also help remove some of the burden of paying for the high deductible, which could encourage them to sign up for this plan option.

## 4. Enable investment of HSA contributions

If you want to encourage employees to contribute more to their HSA and to stay engaged with their account, offering an HSA investment account is a good way to do this. It also helps to ensure they grow their money faster. According to Devenir’s [2023 midyear HSA report](https://www.devenir.com/wp-content/uploads/2022-Midyear-Devenir-HSA-Research-Report-Executive-Summary.pdf), the average total balance of an investment HSA was $16,397 in January 2023, which was 6.7x larger than the average non-investment account balance. The more success employees see they’re having in growing their medical safety net, the more they’re likely to stay engaged with it.

At Lively, we've seen that an easy-to-use platform, outstanding support, and built-in account holder education can boost engagement and help employees maximize their HSAs. In fact, in our [2023 HSA Snapshot Report](https://livelyme.com/blog/hsa-snapshot-report/), we found that Lively HSA account holders invest at two times the industry average and retain nearly $300 more a year than the average account holder.  

## How Lively can help

Lively is your partner in ensuring your benefits strategy is successful. We offer a best-in-class product that is easy to use and understand, and makes it easy for employees to invest their savings. That partially why Lively HSA account holders save more and invest at double the industry average. We take care of employee onboarding and education and serve our plan participants and clients with diligent customer service. If you’re ready to level-up your benefits package, [reach out today](https://livelyme.com/contact-sales/).


Did all of your eligible employees open their Health Savings Accounts? Here’s how to improve participation.

The fact that [Lifestyle Spending Accounts (LSAs)](https://livelyme.com/guides/lsa-guide/) are fully customizable can be a double-edged sword. On the one hand, this flexibility allows companies to design a plan that best reflects its ethos and meets its employees’ needs. But it can also make it difficult for employers to know where to start. This post will help you develop a framework for designing the best plan for your company so that it delivers maximum impact and receives optimal engagement from your employees.

## A quick overview

LSAs are a relatively new type of benefit so many employers and employees alike aren’t as familiar with them as they would be with an HSA, for example. LSAs are essentially an allowance an employer gives its employees to spend on predetermined everyday expenses. The account is fully funded by the employer and employees pay income taxes on the amount they use. The employer decides which expenses it wants the LSA to support, how those expenses are paid for, the cadence at which the money is replenished, and what happens to the money after the plan period expires. 

Since LSAs are an after-tax benefit, there are very few restrictions on how employers can design these plans. The only two requirements the IRS has are that LSAs are not used to pay for medical expenses covered by health insurance (since this would qualify the LSA as a health plan) and they can’t be used to pay for expenses that could otherwise be covered by a pre-tax benefit. To narrow in on how your company would like to design its LSA, follow the steps below.

## Types of LSA designs

There are many ways you could design your LSA. Here are the major decisions you will need to make:

- __What is your intention in offering the LSA?__ What are you hoping to gain or what problem are you hoping to solve? Answering this will help guide the answer to the following question.
- __Do you want to have a single, general-use LSA or one or more targeted LSAs?__ Your general-use LSA can reimburse for as many types of expenses as you would like. This might be a good option if you have workers from a wide demographic range that have a variety of needs. If your goal is to send a specific message about company values or address a specific issue like equipping remote workers with the set up they need or encouraging financial wellness, then you can choose to have an LSA that pays for costs under a single category.
- __How do you want employees to access their allowance?__ Do you want them to submit for reimbursements or to have access to a preloaded card? The expenses you are reimbursing for should influence this decision as large expenses that may be cost-prohibitive for an employee to cover upfront. Also, keep in mind that the more freedom and flexibility employees have will increase their overall satisfaction with the program.
- __What technological capabilities are important?__ Having an app could greatly increase the employees’ engagement with the LSA and their overall satisfaction.

Now that you’ve answered the general questions, narrow in on the details.

## 1. Determine your budget

The total per employee [allowance](https://www.mercer.com/en-us/insights/us-health-news/lifestyle-spending-accounts-your-top-questions-answered/#:~:text=Employers%20implementing%20LSAs%20have%20different,range%20from%20%24500%20to%20%242%2C000.) for LSAs typically ranges from $500-$2,000 and anything less than $250 would likely not be very impactful. Companies covering large expenses might give a larger allowance of up to $3,500. 

So knowing this, determine how much you can allocate to this benefit. One way to increase the benefit’s impact is to audit your employees’ benefit utilization data to see if there are any plans or programs that are being underutilized and consider diverting money from them to the LSA.

Remember that the money you are committing is only spent if the employee uses it. Any part of the allowance that isn’t spent during the plan term is reabsorbed by the company.

## 2. Figure out the types of expenses to cover

In order for your [LSA to deliver impactful support to your employees](https://livelyme.com/blog/how-to-maximize-your-benefits-package-with-an-lsa/), you want to make sure you’re covering the right expenses. To find out what the right expenses are, you have to gather some information from and about your employees.

1. __Survey your employees.__ Ask them about their wellness goals for the coming year, what they’re struggling with, what their fears are, etc. Also ask them about any holes they see in your current benefits offerings.
2. __Audit your benefit utilization data__ to see what employees are using and what they aren’t.  

So use your employee data to determine the list of issues your employees are facing and prioritize them from most acute to least. For your LSA to be impactful and help define your company’s culture around wellness, the issues you address with your LSA should both [match employees' biggest needs](https://www.gallup.com/access/239231/action-planning.aspx?&utm_source=google&utm_medium=cpc&utm_campaign=new_workplace_non_branded_employee_engagement&utm_term=build%20employee%20engagement&gclid=CjwKCAjwscGjBhAXEiwAswQqNN9zQp3c9y2EXjBvJvi2dpj3B6521GSkX8JnGXCYSHYw2afL5z1YjhoCHZ4QAvD_BwE) and align with company values.

Once you’ve decided on the issues you want to address, list the possible expenses that could help with those issues, prioritizing them from most impactful to least. Then compare this list with your budget. Your per employee budget will largely dictate [the types of expenses you’re going to cover with your LSA(s)](https://livelyme.com/blog/what-can-a-lifestyle-spending-account-be-used-for/). That’s because you want to be able to offer enough money so that it’s a meaningful contribution toward the expense the employee is taking on. Otherwise they might not engage with the LSA and offering it will have little benefit to the company.

## 3. Decide on the plan cadence

The cadence at which you replenish your employees’ LSA allowance will depend on the types of expenses you’re covering and your budget. The LSA should renew at a cadence that makes sense for how often employees pay for that expense. 

So for example, if you’re offering a fitness-focused LSA, it might make sense to reset LSA on a monthly or quarterly basis. If you’re offering an LSA focused on big-ticket items, your LSA might have a single, lifetime value (e.g. employees are given a $3,000 allowance to use towards buying furniture for their home office, but once they use it, it doesn’t renew). If you have a large, multi-use LSA, it might make sense to renew it on an annual basis.

As with choosing the expenses you’ll cover, you’ll want to make sure your budget supports the cadence at which you choose to renew the accounts.

## 4. Keep your employees informed

Offering employees an LSA that is thoughtfully designed and sufficiently funded can be a [great way to support them both at and outside of work](https://livelyme.com/blog/is-a-lifestyle-spending-account-worth-adding-as-an-employee-benefit/). But it can only benefit them if they participate in the plan. Did you know that [45% of employees](https://www.benefitnews.com/news/employees-dread-benefits-open-enrollment) feel apprehensive about open enrollment? In fact, many of them said they dread it as much as renewing their driver’s license. 

It doesn’t have to be this way. Employees should be excited to sign up for [benefits like an LSA](https://livelyme.com/lsa/) and the way to get them onboard is to communicate the plan effectively. This means using multiple channels to explain how the plans work and how they can positively impact employees’ lives in simple language that’s easy to understand. 

Partnering with a vendor that helps with employee communication and onboarding, as well as offers responsive customer support can help your HR team increase employee engagement. It’s also important to keep your employees updated on their LSA balance, any upcoming plan deadlines and account renewals.

## Get started with Lively today!

Lively is your partner in offering a best-in-class benefits package that will increase employee wellness and engagement. We offer HSAs, FSAs, HRAs, [LSAs](https://livelyme.com/lsa/), Medical Travel Accounts, and COBRA. We can help you design the most impactful plan for your organization and budget so that you can deliver the support your employees need to be their most productive selves at work. To get started, [reach out today](https://livelyme.com/contact-sales/). 


Designing an LSA Program: Best Practices for Employers

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