HSA Education for Employees

As I was updating the HSAconsumer.com website, I came across this article discussing the need to “engage” employees in leveraging their HSA Health Savings Account.  This is exactly the whole purpose of our website…..to engage and educate employees who have questions.  How do I save in an HSA? How do I spend my HSA money correctly? HSAconsumer.com was developed to answer these questions for no charge, and complement the HSA educational need that’s expressed in the article below. But HSA’s are a complicated product, and nobody has enough time in the day to become savvy enough with their HSA. Needing access to HSA answers is a 365 day a year endeavor.  It’s just not physically possible for employers and agents to be available to respond to all employee requests.  People get sick on weekends and in the middle of the night, and they need medications and money to pay for it NOW. There is so much to know about HSA’s, and the best thing people can do, is just remember HSAconsumer.com can answer your questions 24/7/365.

It’s tough to project needed savings unless you have known expenses upcoming in the future (like daily medications). But most people don’t know about unknown future expenses, and are hesitant to have a “plan”.  Here are my answers to someone asking “should I contribute to my HSA?”:

1. Should I contribute to my Health Savings Account?  YES, and save a lot

2. How much should I contribute?  The most possible, up to allowable maximum

3. What if I don’t need it because I’m healthy? Don’t worry, all funds roll over each year, and is yours to keep forever.  You can use it for retirement or long term care later in life.

4. Is contributing a smart move? YES, if you feel that you need to save in the most tax efficient way for your future medical and retirement expenses. Or NO, you like paying more in taxes.

5. Is there a HSA calculator I can use to give me an incentive to start?  Yes, several are available at HSA Consumer Calculators page.

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Read More:  Benefits Pro – Helping Employees Understand HSA’s

As limits are being imposed on flexible spending accounts starting in 2013, more employers are turning to health savings accounts. Many employers see HSAs as an option to enhance awareness and consumerism of health care costs, but it takes some effort to help employees fully realize how HSAs work.

Traditionally, HSAs have been seen as a type of plan that is best for people with few health issues, but that is not necessarily true, says Paul Ashley, adviser for FirstPerson, an employee benefits firm in Indianapolis. In Ashley’s experience, HSAs can benefit all types of people – no matter their health care costs – if they are willing to take an active role in their health and consumption.

“Those who tend to do best with an HSA-style plan are those who understand they have power as a consumer, and they can seek information and be a good consumer of their health care,” Ashley says. “People who want to take an active role in their health and their consumption of health costs will benefit from an HSA, so I disagree with the old philosophy. I think the real question is are you someone who wants to take control of their health and be a true consumer in how you use your dollars?”

For many employees, understanding what is covered by HSAs can be tricky, and employers should help employees realize these limitations, says Scott Sims, legal consultant for Aon Hewitt, a human capital consulting firm in Chicago. An HSA can be used to purchase any good; however, if the purchase ends up being for an item that is not a qualified medical expense, the health care reform law mandates that the buyer is assessed a 20 percent penalty fee, which can be surprising when it comes time to file taxes.

“Other types of accounts like a health FSA or health reimbursement account require all expenses to be substantiated, so you can only use your health FSA or HRA for qualified medical expenses,” Sims says. “In some cases, if a plan has a debit card, the debit card won’t even work if it’s not being used on eligible expense. With the HSA, there’s really no limit, so when people use HSAs to buy just anything, they find out that it comes with the price.”

While continuing education is important for all benefits programs, it is especially necessary for HSAs, Sims says. One of the biggest mistakes employees make with HSAs is not putting away enough money. When a big claim occurs, there are not enough funds to cover the expense, and it’s the employer’s job to help its employees understand how to get the most out of their HSA plans.

Sims finds tools, such as online cost estimators, can help employees get an idea of how much they should save. Employers can also consider holding benefits fairs throughout the year or offering programs that forecast potential tax savings, which can encourage employees to contribute to their HSAs.

“Getting employees engaged in an HSA plan is the single most important factor in getting them to contribute,” Sims says. “You really need a comprehensive program between communications and employee engagement. Not one thing in a vacuum will probably work. You’ll have to do a lot of those things to get people involved and engaged.”

4 Comments

  1. Paula Colling says:

    Your site is interesting and comprehensive, and a good reference tool. The only slightly negative feedback i would offer is that helping people understand HSAs really isn’t that hard to do if an employer has a good agent partner AND takes the time to do some q&a with a bank who knows what they are doing as well. if an agent is not willing to know the nuts and bolts of what they are selling, and an employer is not willing to do some research and find a bank that will work with their group in a fee-free environment while providing educational tools, the outcome will end up being frustrating for all concerned.

    Education from the banking perspective for the group as a whole and as part of MANDATORY benefit meetings is critical. We find that the success/satisfaction rate of a group of HSA users is directly linked to whether or not the employer requires folks to physically show up for a benefit meeting and to fill out forms or do online enrollment together.

    The concept of using a checking account (as you know HSAs are checking – not savings products the majority of the time) and using network discounts, generics,and comparison shopping is not hard to get if participants aren’t led to believe that “this is complicated, hard stuff” right from the beginning. We do this type of education everyday, and custodian accounts for 400+ employer groups nationwide.

    Our approach for groups and individuals is one of the end-user, because we have had a CDHP and HSAs ourselves for 7 years along with a vibrant wellness culture. We are self-funded, and we are very candid about cost with employees, taking a “we are all in this together and all of our behaviors effect our shared outcomes” approach.

    • admin says:

      Paula, thanks for your insight and so glad that we have people like you out there educating people on how to use their HSA Health Savings Account correctly. A little bit of employee HSA education goes a long way, and agree that mandatory employee meetings are part of the solution. Employers really need to leverage the expertise of their health insurance agent and their HSA bank representative to make a successful transition to an HSA, and then the ongoing HSA education as refresher courses or new employees. HSAconsumer.com is a free service and was created to answer those questions that HSA owners may have; when you’re asleep, the agent is in a meeting, or the employer is closed for the weekend. We look forward to your contributions to our blog!

    • Hicham says:

      I agree with some but not all of your proposals. Insurance companies do a very poor job of covering catastrophic risks, and a lot of what they do what to insure is routine stuff most people don’t need insurance for. The government should concentrate on the problems of catastrophic risks and let those who want to buy private insurance for other things do so.Tax free savings accounts are an interesting idea, but whether they make economic sense depends on the details.I think we should endeavor to reduce medical mistakes and negligence, so that people do not suffer and die needlessly. There is too much of that, including neglect which results in infections caught in the hospital. Very few victims of that actually sue, because lawyers want clients who had a huge income, because that is how they get the big awards. “Tort reform” should focus on getting rid of the bad doctors so more people don’t get maimed or die.I don’t think the sale of insurance across state lines will make much of a difference.

  2. Paula Colling says:

    Thanks so much for replying to my comments, and I will continue to follow your blog contributing whenever possible! it is very nice to know that the knowledge you have regarding HSAs is here for folks 24/7.

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