Even with 26 million Americans using health savings accounts (HSAs)*, there is still widespread confusion about how HSAs work and how to get the most value from these triple tax advantaged accounts. It's more important than ever to find creative ways to engage and educate employees.

Using research findings and personal experience we have created the “Four Keys to HSA Engagement” that, when used consistently, have proven to increase employee participation and HSA balances while also improving healthcare spending habits. The four keys include:

Know the numbers
Keep it up
Easy does it
Make it matter

Open enrollment is an incredibly busy time for employers and their employees. Employees are offered a plethora of incredible benefits from health insurance to a 401(k) plan to pet insurance. But with an array of benefits comes a lot of information. Unfortunately, many employees become overwhelmed because they don’t have the time or experience to analyze all the information. This is especially true when it comes to health insurance as many employees stick with the same plan they’ve had in the past. This can result in overpaying for coverage they don’t need or missing out on an opportunity to save for future medical expenses in an HSA. This is why the first key to engagement, “Know the numbers”, is so important.

Know the numbers

Employees need to understand the key elements of their health plan options so they can compare them based on their personal situation. While the deductible amount is certainly important, it’s not the only criteria to evaluate. While an HSA-eligible plan may have a higher deductible than a traditional or PPO plan, the premium differential may be significant enough to cover more than the difference in deductibles. Add in the potential HSA tax savings and the HSA-eligible plan could save an employee even more. Find an online tool (many are free) offered by your insurance provider, benefits administrator, or HSA provider that helps your employees make these comparisons so they are selecting the right plan based on their needs. You might be surprised how often the HSA-eligible plan is selected, even if those employees feel they have higher than average medical expenses.

Keep it up

The next key is “Keep it up”, meaning don’t stop your communications at open enrollment but rather communicate throughout the year. I like to look at communications based on the four seasons of HSAs: open enrollment, the start of a new year, at tax time, and mid-year. Mid-year is a great time to remind employees of the IRS contribution limits and potential tax savings related to increasing their contributions.

Easy does it

The third key is to keep your plan, and your communications simple. Again, many employees are overwhelmed by the amount of benefits information we give them so the more we can simplify the terminology the better off they’ll be. Instead of calling it a high deductible health plan or consumer directed health plan, refer to it as your HSA-eligible plan so it’s obvious the plan allows for linking an HSA account. The terms “high deductible” also connotes expensive, but it might not always be the case given the potential for premium savings and HSA contribution tax savings.

Make it matter

Lastly, when employees care, they tend to listen. Make the HSA matter to them and their families. Design your HSA program with account seeding (i.e. a small amount of money contributed by the employer) or a match contribution, similar to your 401k plan. This encourages your employees to take action and consider contributing their own money when you’re incentivizing them to do so. I also encourage employers to use simple relatable examples, such as buying prescription drugs. A prescription drug from Walgreens may cost $30 when purchased out-of-pocket but when bought with HSA dollars they could get a 20-30% discount due to the federal, state and FICA tax savings.

HSAs are an incredible benefit for employers and their valued employees. A few simple changes to how we design the program and communicate with our employees can lead to significant increases in HSA participation, contributions and healthy spending habits.

https://www.devenir.com/research/2019-midyear-devenir-hsa-research-report/