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Why Employees Don’t Use Their HSA [And Why They Should]

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Written by Robert Hanlon
Posted on October 16, 2019

If you work with, or administer health plans, it’s obvious that the majority of tax advantage accounts (i.e. HSA, Flex etc.) don’t receive enough attention. Employees don’t necessarily value their accounts, because they don’t understand what they’re even for. A study conducted by ebri found that the majority of HSA accounts are used incorrectly . For example: 

  • Only 13% of HSA accounts reach their annual maximum contribution level 
  • 77% of HSA accounts with contributions also had distributions 
  • Only 4% of account holders invested the money in their HSA account 

Long Term Savings Don’t Matter

After reviewing countless studies on actual account contributions, we can infer the following:

  1. Individuals aren’t using their health account as a long-term savings account, and they don’t view it as such
  2.  People don’t see any value in contributing to their accounts

It’s important to acknowledge that these accounts are supposed to be driving healthcare affordability for the employee, but they need proper utilization (i.e. contributions). Employees overwhelmingly report that they don’t understand their entire benefits package, and don’t necessarily value it, despite the heavy cost born by the employer. As industry professionals, we need to ensure that employees understand why their health savings arrangement is important.

Try The Following

In order to get value out of the account, employers can do the following: 

  1. Send out communications all year – with the employee about the tax advantage account, not just during enrollment 
  2. Get out of your comfort zone – when it comes to communications, look to social media, video and text rather than just emails. People in 2019 respond extremely positively to videos as a form of content consumption. 
  3. Consolidate employee options – to make it simple for the employee, look for a portal that combines their benefit information, fragmented platforms for health insurance, ancillary and health accounts can be tough to navigate. 
  4. Don’t rely on PDFs – most health account administrators haven’t advanced beyond printable documents. While these are helpful to meet legal requirements, they aren’t as impactful as using a multimedia approach.  

By using a combination of these tactics, the health savings arrangement can drive consumerism. Employees have the opportunity to be empowered by their high deductible plans, rather than fear them.

Here’s a video on how we drive HSA education

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Care Facilities: Cheap or Expensive
Driving Employee HSA Utilization for Employers and TPAs
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