For most people, October means pumpkin spice lattes and candy. But for HR people, it means “open enrollment” season. As you put together your educational information to introduce your team to their different options, one you might pay particular attention to is the use of high-deductible health plans (HDHP), specifically the ability to pair them with a health savings account (HSA).
Exploring the Benefits
Interestingly, a recent survey found that how employers and employees view these is different: It found that 66% of employers position HSAs primarily as a savings account, while almost the same amount—65%–view them as a “spending” account to use for current healthcare needs. (Another 23% say they use their account equally for saving and spending.)
But if you aren’t aligning with the way that employees prefer to use these accounts, you might inadvertently be discouraging your team from using them today for necessary healthcare costs. If the HR team positions them primarily as a savings vehicle, employees might put them in the same mental space as a tax-advantaged retirement account—in other words, largely off-limits to use.
And that confusion might mean that many of your employees are missing out on the many benefits that a HDHP can provide. While they are not for everyone, especially people who have chronic conditions or use a lot of healthcare services, they can be a great option for an employee who doesn’t have immediate health concerns. (Of course, we know that can change in an instant, which is why it’s smart to also ensure your employees avail themselves of disability insurance!)
It’s all too easy for an employee to dismiss a HDHP out of hand, because they are conditioned to see a lower price tag and think it’s a better value. But if they spend some time doing the math to see that they might not ever run up that huge deductible—and that their HSA is there waiting if needed—they might give it a closer look, which could end up being the right financial choice in the long run.
Of course, your job is merely to present all the options without making recommendations or favoring one type of plan over another. But by emphasizing the dual roles of an HSA—as a savings vehicle, but also one that an employee can tap as needed to cover that large out-of-pocket payment should it occur, they might be more open to considering this as the type of plan that’s right for them.
Education is Key
In other survey findings, three-quarters of employers believe their employees fully understand how to use an HSA, but only 60% of employees say they feel confident.
That’s why education is key. As you discuss various choices, make sure you cover pertinent facts about the HDHP to help employees become more educated:
- These plans have high deductibles, but they also lower insurance premiums, which can make health coverage more affordable.
- These plans benefit healthy people who will primarily need coverage in case of a serious health emergency. That’s because the majority of preventive services are already covered, as mandated by the ACA.
- This type of plan typically gives you access to a HSA, which is a great place to save each month for a potential future medical bill, while enjoying the benefits of using pre-tax dollars, which will make your contribution go farther.
- While these accounts can roll over year to year (and even job to job), that doesn’t mean you shouldn’t tap them if you need them to cover an unexpected medical bill. After all, that’s what they are for!
- For 2021, the annual limit on HSA contributions has increased to $3,600 for a single employee plan and $7,200 for family coverage.
“Employees and employers are not speaking the same language when it comes to health savings accounts,” said Matt Marek, CEO of Further, a national health savings administrator. “By positioning HSAs as saver only tools, employers are missing the opportunity to help their employees meet a critical need: paying for health care costs today. As an industry, we need to change the narrative around HSAs to empower employees to be active health care consumers.”
Open enrollment season presents the opportunity for the HR team to really make a difference in their employees’ lives by helping them select the right choices for all aspects of their wellness. By creating and using a robust suite of educational resources that emphasize a variety of aspects of all their choices, you can make sure they are well-qualified and informed to make the best choice for their personal situation.