If you’re reading this post, it’s likely you are responsible for something important: helping employees make smart decisions about their health benefits. Ultimately, those decisions will significantly affect the well-being of employees and their families. Navigating the HSA conversation in particular can feel like quite a challenge. What is an HDHP/HSA? How does it work? How will it affect my health care costs?
To help your employees gain a better understanding of the HDHP/HSA (and the role you can play), I’ve outlined my top three insights below.
My hope is that by the end of this post, you’ll feel confident and ready to speak to the benefits of the HDHP/HSA plan.
1. First, HDHPs and HSAs work together
Employees need to understand that an HDHP and an HSA are two parts of their coverage that are connected and work together. In particular, employees need to understand that they must be covered under an HDHP (and can’t be covered under a “regular” non-HDHP plan) in order to contribute to an HSA. As an employer, you get to decide if you’d like to make a contribution to the HSA – we recommend you consider doing so, if possible, to encourage selection of the plan and help employees with some first dollar coverage for needed services. If you do make an employer contribution, you also get to decide whether or not to pair with a financial institution to set up the HSA. If you don’t make an employer contribution, you can encourage employees to set up the HSA through a bank or credit union of their choice.
2. Help employees understand the “big picture”
Employees can find the idea of an HDHP intimidating, so it’s important to make sure they have good information about how the plan actually works. While employees will have a higher deductible, their monthly premium is usually lower – it’s important that they keep both costs in mind. And, if you offer an employer HSA contribution, make sure they understand how that money can help them cover their deductible and other out-of-pocket costs. Once they are able to really “run the numbers,” many employees discover that they could be saving money on an HDHP/HSA plan. Plus, by contributing to an HSA, they’re able to get important tax savings.
Insider tip: Check out Plan for MeSM —a great tool your employees can use to compare plans and estimate costs.
3. Use the HSA to save or spend
HSAs can be used in ways that meet your employees’ individual needs. If an employee needs to use their HSA money to cover everyday health expenses, they are accessible directly from the account. Funds can be used for deductible or coinsurance costs for doctor visits, medical tests and procedures, and even things like glasses and contacts. If they’re a saver who plans to stash HSA money for possible emergencies, they’ll have a powerful rainy day fund if they ever need it, and they may even find they are able to eventually use their HSA as another tax-advantaged investment towards retirement.
Insider tip: If your employee leaves the organization, they can take their HSA with them (just like a retirement account).
If you’d like more HSA resources, check out these links:
Thank you, as always, for helping employees know and navigate their options.