Are your employees getting the most out of their health savings accounts? Why education is key to adoption.

Health Savings Accounts (HSAs) are a powerful tool for managing healthcare expenses and saving for the future. However, many employees are not fully aware of how to maximize their HSA benefits. Offering education on these benefits can significantly enhance employee financial wellness, drive higher enrollment rates and increase account balances. This article explores the reasons why you should partner with an HSA administrator that is truly committed to delivering the educational content your employees need.

The importance of HSA education for your workforce

Even though HSAs have been around for over 20 years, many people continue to use them as flexible spending accounts, meaning that they spend down all the money in the account on healthcare expenses and to offset high-deductible health plans. While this is a valid way to use the account, and accountholders will still see some tax savings, there is so much more they may miss out on.

Increasingly, HSA benefit administrators are promoting health savings accounts as a financial wellness benefit. The tax advantages and flexibility mean it can be many account types in one:

• A health care account to pay expenses for today.
• A way to save for unexpected expenses tomorrow.
• An emergency savings account for a rainy day.
• Another source of income in retirement.

Educating your workforce about HSAs can lead to significant benefits for both employees and employers:

1. Increased enrollment and participation: Employees who understand their HSA benefits are more likely to enroll and actively participate. This can lead to higher overall engagement in your company's benefits programs.
2. Improved financial wellness: Educating your employees about effective HSA use includes teaching them how to save for current and future healthcare expenses, which can reduce financial stresses that may carry over into the workplace.
3. Enhanced employee satisfaction and retention: Employees who feel well-informed about their benefits are generally more satisfied with their employer. This can lead to improved retention and reduced turnover rates.
4. Cost savings for employers: Educated employees are more likely to make informed healthcare decisions, which can lead to lowering your company’s overall healthcare costs.

Two examples of successful outcomes

Here at Associated Bank, we’ve seen firsthand how education has led to increased rates of employee HSA enrollment, as well as greater contributions to their accounts. Let’s look at a couple of case studies:

Manufacturing company / Minnesota

This company recently hired a new primary compensation and benefits manager whose key initiatives included enhancing their employee benefits education. They asked Associated Bank to help teach their workforce about their HSAs. Our team conducted live and recorded onsite meetings, distributed educational materials and introduced our decision support tool.

The results?

• Open accounts grew by 37%.
• Election amounts increased by 42%.
• The average election amount increased by 4%.

Educational institution / Wisconsin

As part of their ongoing wellness program, this educational institution decided to put a greater focus on financial wellness this year. They asked us to help employees understand the flexibility of a health savings account—that they can use it not only a way to pay for today’s out-of-pocket expenses, but also as an emergency savings account and/or as retirement income.

The Associated Bank account executive hosted onsite meetings, recording them for employees and their family members who could not attend. We also provided attendees and HR with relevant educational materials as well as our decision support tool to help them determine how much to contribute to their accounts to meet their financial goals.

The results?

• Open accounts grew by 8%.
• Election amounts increased by 20%.
• The average election amount increased by 10%.

What should be included in an HSA education program?

While many employers offer HSAs as part of their benefits package, many employees don’t enroll because they simply don’t see the value. In a recent Plan Sponsor Council of America (PSCA) survey, researchers found that only 80% of people enrolled in an HSA-eligible health plan opened and contributed funds to an account.

These are the kinds of topics that can help employees better understand and appreciate what they can get out of an HSA.  

HSA basics

Effective education should help your employees understand how an HSA works, its triple tax advantages and guidelines for eligibility.

Contributions and planning

Each employee should make this decision based on their personal circumstances and goals. An HSA education program help make this decision easier, from IRS rules and annual maximums, to support tools to help them determine their personal contribution plan.

Ways to use an HSA

Employees should learn how to use their HSA while retaining all the tax benefits these account offer. This includes ways to use their funds strategically, whether for day-to-day or future healthcare spending, emergency savings or retirement income.

Maximizing HSA balances

Depending on your HSA administration partner, your employees may have different options available to keep their account balance growing. They should understand contribution and distribution strategies, interest rates on cash deposits, and investment opportunities like mutual funds and CDs.

Delivering Effective Education

The ultimate key in educating employees on benefits and uses of an HSA is repetition. Studies have shown that adult learners need to see information six times to retain and remember the information.

Providing education in multiple formats stretched out over time will help. Giving employees materials they can review at home also makes it easier for them to go over these decisions with family members.

To be effective, HSA education should be delivered in a variety of formats to fit different learning styles:

• Written materials: Comprehensive guides and FAQs can help employees understand the basics of HSAs.
• Webinars and videos: Interactive sessions can engage employees who prefer auditory learning.
• Interactive tools: Decision support tools can help employees determine contribution strategies and understand the potential growth of their HSA.

Educating employees about maximizing the potential of their health savings accounts is crucial for their financial wellness. By investing in comprehensive HSA education programs, your company can expect higher enrollment rates, increased contributions and a more engaged, satisfied workforce.

Partnership with an HSA administrator like Associated Bank can help you provide the necessary education your employees need to make informed decisions about their health savings and financial future.

For more information about how Associated Bank can help with HSA education and other financial benefits solutions, contact our team today.