Six crucial action items to
improve your benefits now
How benefits brokers and HR administrators can offer a flexible, competitive, and cost-effective better benefits package with HSAs at the center.
Looking at the behavior of Lively HSA account holders over the past year emphasized a few key action items that benefits brokers and employers can take into consideration.
These include offering a robust, easy-to-use HSA alongside a High Deductible Health Plan; working with an HSA provider that has robust, easy-to-use features for administrators and account holders and supports benefits education; investing in and supporting employees’ mental health; and bundling HSAs with other pre-and-post tax benefits to offer a holistic, flexible benefits package. These will help drive HSA adoption and ensure employees are getting the most out of their benefits, while also enabling employers to maximize healthcare cost savings.
An HSA is a critical benefit offering to help employees offset the rising costs of healthcare and prescription drugs.
Consumers are feeling the price squeeze from every angle and healthcare and drug prices are no exception. One in four adult Americans put off needed healthcare due to cost according to KFF. In addition, in their 2023 Consumer Engagement in Health Care Survey, EBRI found that 42% of people who have a High Deductible Health Plan (a requirement to have an HSA) were not satisfied with out of pocket costs. Further highlighting the cost squeeze, prescription drug prices rose 15.2% in 2023 and Lively’s account holders spent 17% more of their HSA funds on prescription drugs to help afford them.
An HSA can help offset the out-of-pocket costs for a High Deductible Health Plan. ACA-approved primary care is covered 100% and costs of these plans are lower for both employers and employees. To enable employees to get the most out of these plans, organizations offering HDHPs must pair them with an HSA.
To maximize cost savings, investing in HSA education for account holders and employers is critical. To save time, work with a provider that supports HSAs education.
To help account holders maximize their savings, HSA account holders need ongoing education on how to get the most out of their HDHP/HSA combination. Despite the benefits of High Deductible Health Plans, enrollment in HDHPs fell by 2% nationally in 2023. Lively found that over 55% of HR and benefits leaders found the primary barriers to HSA adoption are that lack of education of the value of an HSA, as well as confusion around the differences between HSAs, Flexible Spending Accounts, and Health Reimbursement Arrangements. While it is critical for HSA adoption, employee education can be challenging and time consuming for benefits professionals. 63% of HR and benefits leaders felt that employee education was one of the most challenging aspects of benefits administration, according to a survey of 250 HR and benefits leaders conducted by Lively. Nearly one third of respondents also felt that employee education took more time than they expected.
Work with an HSA provider that offers an easy-to-use platform that gives account holders options and flexibility for how they manage their account.
Beyond HSA education, enabling easy access to HSA funds, simple account management, and investment options is critical to keeping account holders engaged with their HSA. These include:
- Debit cards
- Simple to access platform on dashboard and mobile
- Easy expense reimbursement
- Multiple investment options
- Ongoing education within the product
These features are necessary features to ensure account holders use their HSA to their potential.
of people with High Deductible Health Plans are dissatisfied with out-of-pocket costs.
of benefits leaders say employee education is the most challenging aspect of benefits administration.
of benefits leaders say lack of education about the value of an HSA is the primary barrier to adoption.
Don’t neglect the importance of supporting employees’ mental health.
Despite increased focus on mental health since the onset of the COVID-19 pandemic in 2020, HSA spending on mental health has dropped, accounting for only 0.15% of spending in 2023, which is a 20% decrease from 2022. Not all mental healthcare is covered by insurance, so HSAs can be a great option to help employees fill in the gap for therapy and or other forms of care. Educating employees on what mental health expenses can be covered by their HSA can be a great way to reduce the stigma still sometimes associated with accessing mental health care and encourage account holders to take full advantage of the range of expenses covered by HSAs.
Addressing mental health in the workplace should be approached holistically. While many companies offered on-demand teletherapy services during the pandemic and its aftermath, trends are shifting towards offering employees a Lifestyle Spending Account (LSA) that empowers employees to seek and pay for mental wellness care that works for them. These post-tax accounts can support other forms of wellness, including mental wellness apps, life coaching, gym memberships, and even employee travel, to encourage employees to take time off to recharge.
Consider HSAs as part of a larger, comprehensive benefits strategy and bundle your benefits offering to offer employees increased flexibility and cost savings.
Organizations can further offer their team members flexibility and cost savings by combining pre-tax benefits, like HSAs, with post-tax benefits. In Lively’s survey of 250 HR leaders, we found that 80% of HR leaders feel that offering competitive financial benefits is more important for attracting and retaining employees than it was a year ago. In addition nearly 50% reported that employees' financial stress has risen in the past year. Offering a range of spending and savings accounts can help further ease the burden of rising costs for employees by covering daily expenses they are already paying for.
Couple HSAs with post-tax benefits such as Lifestyle Spending Accounts. These accounts can be used on a wide variety of expenses that are not covered by health insurance, such as gym memberships, wellness apps, professional development, financial wellness, pet care, and more. Offering a range of Lifestyle Spending accounts can help further ease the burden of rising costs for employees by covering daily expenses they are already paying for.
Paired with a high deductible health plan (HDHP) HSAs can drive healthcare savings for both employees and employers. However, HSAs are also compatible with a variety of other savings and spending accounts that employers should consider offering, including:
To maximize impact, start planning next year’s program now.
Benefits are a critical factor in a person’s decision to take, or stay at, a job. Companies can begin to prepare to offer the most competitive benefits package available by evaluating their current HSA, and benefits offering, and see how they meet their teams’ needs. Right now benefits leaders should:
- Survey employees to find out what benefits are most valuable and what they do, and do not, like about your current benefits providers.
- Evaluate HSA usage and adoption and work with their provider to provide mid-year education to increase adoption and set the stage for open enrollment.
- Plan for your employer contributions following the IRS’ announcement of the 2025 contribution limits in the spring.
Planning the benefits you will offer early and how you will support employees' financial health and wellness will ensure you remain competitive and get the most for your budget now.