Lower Costs, Improve Benefits with HSA On Demand®
HDHP Adoption Skyrockets with HSA On Demand
Think of HSA On Demand as health care overdraft protection. Providing this safety net improves employee participation, resulting in financial benefits to the employer in the form of tax and cost savings.
By eliminating the up-front risk of a catastrophic financial event, and addressing concerns about higher deductibles, employees enroll in the HSA with confidence and ease of mind.
And employers potentially save hundreds of thousands of dollars by going full replacement and moving towards a high-deductible health plan (HDHP) with HSA On Demand.
“HSA On Demand was a key part of our strategy in addressing colleagues’ concerns around cash flow and the ability to pay for care, particularly earlier in the plan year. This was an investment that we needed to make.”
The Employee Experience
With HSA On Demand, participants can access their full year’s contributions any time, and employers can make their contributions at the end of the plan year instead of the beginning.
This means that account holders can cover their entire HDHP deductible from day one.
Frequently Asked Questions
With most HSAs, employees can only use funds after they’ve been deposited into the account. This means that there may be times, especially near the beginning of the plan year, where the HSA balance might be insufficient to cover an employee’s eligible medical expenses.
With HSA On Demand, employees can access future contributions before they’re deposited, to cover these expenses.
HSA On Demand allows access to funds before expected contributions are applied to the Health Savings Account. It’s basically an acceleration of funds that enables access to future HSA contributions. The feature is optional, at the discretion of the employer. Your company can decide if employee, employer, or both types of contributions will be accelerated, and whether there is a cap on the accelerated amount.
After setup, HSA On Demand works automatically. If an employee is paying for an eligible expense with the health care payment card, the program will automatically cover the amount needed — up to the available limit — right at the point of sale. It works the same way if an employee chooses to pay with personal funds and then requests reimbursement.
Claims will pay first from any available HSA balance. If the HSA balance is not sufficient to pay the claim, then any available program funds can be used. HSA On Demand is plan-year specific, meaning accelerated funds can only be accessed for payment card transactions or claims submitted with dates of service in the current plan year.
Accelerated funds are available on the first day of the plan year; however, accelerations are only available after a claim is incurred. Employees cannot access additional funds if there is no claim to pay.
Since funds are accelerated future contributions, the amount available for employees to use decreases throughout the plan year. The amount available for use is visible at any time online, in the Participant Portal.
No extra steps are necessary — if accelerated funds are available, the amount needed is automatically applied at the point of sale, or when reimbursement is requested as usual from the HSA. We’ve kept it seamless and simple.
There is no paperwork, interest, or penalty for HSA On Demand funds, and employees do not have to take any extra steps in order to pay the funds back. Future HSA contributions are simply reduced by the amount used until it is all paid back, and the HSA balance will not increase until scheduled HSA contributions pay off the amount used.
HSA On Demand funds are available only after all HSA holdings have been depleted, including mutual funds and other investments. Employees will be required to liquidate any investment holdings into the liquid, cash account portion of their HSA before accessing program funds.
If an employee has HSA investments, the platform will show a “frozen” status. Once the investments are liquidated, the status converts to “active.”
If an employee has used any HSA On Demand funds, they are required to return the amount used. Employers may withhold HSA On Demand funds from an employee’s final paycheck.