5 Simple Ways to Increase HSA Enrollment

Looking to cut costs for 2021? One way to lower expenses while providing cost-saving value to employees is through high-deductible health plans (HDHPs) combined with health savings accounts (HSAs). HDHP/HSA plans can be part of a powerful savings strategy for both employers and employees, offering lower insurance premiums while reducing FICA tax responsibility since the income directed to an HSA is tax-exempt. That’s 7.65% in tax savings just from HSA enrollment!

Even though HSAs are beneficial for employees looking to save on health care costs, a lack of awareness about the advantages and uses of these accounts remains a barrier to enrollment.

With 2020 open enrollment in play, we wanted to share our research-backed, actionable tips for increasing HSA adoption among employees.

1. Spell Out the Savings

We mean this one quite literally! Sure, it’s easier to say HSA, but writing out “health savings account” is a simple way to quickly communicate the fact that these accounts are designed for saving money. People tend to associate (or confuse) HSAs with HRAs (health reimbursement arrangements) and FSAs, which are flexible spending accounts. The difference is that HRA and FSA dollars are meant to be spent within the plan year, while HSA funds can be saved all the way into retirement. This feature cannot be overstated: 43% of HSA non-owners and 30% of HSA owners did not know if HSA dollars roll over year to year, according to the Visa Annual Healthcare Research survey.

Clearly stating the “savings” aspect of HSAs immediately conveys their purpose, which is to save money—through lower premium HDHPs, triple tax savings on HSA funds, and interest gained over a lifetime of compounding contributions. And there are investment opportunities, too!

By moving away from industry jargon and spelling out the savings potential of a health savings account, you can pique interest from eligible employees looking for ways to reduce health care spending and avoid confusion caused by association with other benefits like FSAs and HRAs.

2. Consistent Communication

Keep communication about the benefits of a health savings account going all year round, not just during open enrollment. Our research has found that employers who provide education throughout the year on benefits like HSAs experience a 23%–29% increase in account enrollment!

Send out educational resources periodically to avoid overloading employees with materials right before open enrollment, when people may feel overwhelmed by information. If you send everything at once, the details about HSAs can easily be lost in the shuffle. Instead, whenever there is a lull in company communications, pass along educational materials about HSAs for account holders and eligible employees to learn more.

And no need to reinvent the wheel here! You can draw on resources your HSA partner or HR department already have on hand. If you work with ConnectYourCare, you can utilize our HSA Academy or HSAs For Dummies® resources, sending these out for people to read up on the basics and benefits of a health savings account. Send texts, emails, flyers, brochures, or even set up a webinar or phone conference to give an overview of HDHP/HSAs while offering the chance for people to ask questions.

Vary up your communications and keep them going all throughout the year to increase HSA enrollment—and savings!

3. Make the Employer Contribution Count

You can further incentivize eligible employees to open a health savings account by offering an employer contribution for opening an account. In the latest Visa Annual Healthcare Research survey, an HSA owner shared that, “Employer contributions are really important for getting started…the amount I spend is generally what my employer contributes, so what I personally put in is more like savings.”

Halfway through 2020, employers were contributing an average of $673 per employee HSA account (up from $648 in 2019), according to Devenir’s Midyear HSA Research Report. Overall, employer dollars made up 32% of all funds contributed to employee HSA accounts, the same study finds. (The total HSA contribution limit for the year 2021 will be $3,600 for an individual and $7,200 for an employee with dependents, including the employer contribution.)

Offering a contribution to kickstart an employee’s health savings is a great way to encourage a person who may be on the fence about opening an HSA, and you can taper the contribution amount over time. Employer contributions to HSAs are also tax deductible, so it’s really a win-win.

4. Offer an HSA Payment Card

Although the savings potential of an HSA is the principal value, people also have the option to save on current health care spending with their tax-free HSA funds. Remind employees that paying for health care expenses with HSA dollars is essentially like using a 15% to 25% discount voucher since those funds are pre-tax. With spending in mind, it’s also important to make it easy for people to use their HSA funds when they need them, which is where an HSA payment card comes in handy. With the HSA payment card, people can pay for eligible health care products and services just by swiping at the doctor’s office, shopping at their local pharmacy, or punching in their card number online.

Offering an HSA payment card really pays off. According to the Visa Annual Healthcare Research survey, 83% of HSA debit card users said they would recommend health savings accounts to others because of the speed, ease, and security provided by the payment card. Considering that those HSA account owners also ranked family member and friend recommendations as the biggest influence on their decision to open HSA accounts, those potential endorsements by HSA card users could be a valuable tool for increasing enrollment!

5. Boost Adoption with HSA On Demand® for Easy Payment

Another way to reassure health savings account owners that they can access their money when they need it is with HSA on Demand, a unique solution provided by ConnectYourCare that allows employees to access their full year’s HSA funds—including employee and employer contributions—early in a plan year. That means if an employee incurs an eligible expense that is more than their current account balance but less than their annual contribution election, they can use those funds at the point of service, without any penalty or fees. Employees simply continue contributing to the HSA with each paycheck as usual, until the acceleration is repaid automatically through normal payroll deductions. This is where HSA On Demand can play a pivotal role, providing peace of mind to employees that they can access their money when they need it.

By offering HSA On Demand, employers have seen an increase in HSA adoption rates at their companies, with a 62% enrollment rate vs the national average of 30%. In fact, the Visa Annual Healthcare Research survey found that the second most important health savings account feature to non-HSA owners who are considering enrolling is the ability to have funds available to pay for services at any doctor. Offering employees accelerated access to HSA funds could be the deciding factor that gives a person on the fence about an HSA the final nudge to open an account.

Employers, if you have questions or want access to resources that will drive HSA enrollment, check out our HSA administration page to learn how we can help!

About the Author:
Diana Bauza is a content writer based in the Greater Philadelphia area. She writes about products and services in the health and technology industries, with the goal of empowering consumers with quality information to help them make decisions that best serve their needs.

By |2020-10-08T16:29:53-04:00October 8th, 2020|Employer Posts, HSAs, Open Enrollment|
Disclaimer: ConnectYourCare does not provide tax or legal advice. This information is not intended and should not be taken as tax or legal advice. Any tax or legal information in this notice is merely a summary of ConnectYourCare’s understanding and interpretation of some of the current tax regulations and is not exhaustive. You should consult your tax advisor or legal counsel for advice and information concerning your particular situation before making any decisions.

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