Communicating About HSAs a Top Concern for Employers

Employers have misconceptions about health savings accounts as well, but the right providers can help with education and optimizing the benefit based on employees’ needs.

Nearly half (47%) of 1,000 benefits decisionmakers at American employers ranging from two to 5,000-plus employees cited educating employees as their biggest challenge when using benefits vendors, according to a survey commissioned by health savings account (HSA) provider Bend Financial.

The second biggest challenge cited (35%) was educating human resources (HR) staff.

The survey revealed the top three employer misconceptions about HSAs are:

  • Didn’t know an employee needs a high-deductible health plan (HDHP) to be eligible for an HSA (56%);
  • Weren’t aware an HSA stays with an employee even after they lose their job or insurance coverage (50%); and
  • Didn’t know HSAs can include investment options and be beneficial in saving for retirement (43%).

“Oftentimes, employers are equally confused on certain benefits like HSAs and HDHPs,” says Bend Financial Cofounder and CEO Tom Torre. “This confusion and lack of clarity trickles down to employees and can result in less-than-optimized choices and missed opportunities to save money and achieve better overall financial wellness—both for employees and employers.” Torre adds that employers need support from the right vendor partners to educate them and their employees on all the ways the HDHP/HSA combination can benefit both sides.

Selecting HSA Vendors

The Bend Financial survey found the factors employers prioritize when selecting health-related benefit vendors include:

  • Cost (48%);
  • User experience (44%);
  • How well their tech works for/integrates with company systems/processes and other benefits already in place (40%); and
  • How well their tech works for employees (35%).

When it comes to costs for HSA providers, Morningstar’s 2021 Health Savings Account Landscape report says fees continue to decrease; however, they vary among providers.

Morningstar also offered suggestions about which HSAs are best, depending on whether individuals are largely spenders of HSA dollars or largely investors of HSA savings. It says the best HSAs for spenders offer spending accounts without maintenance fees regardless of account size, pay reasonable interest rates on deposits, eliminate or limit additional fees, and offer FDIC insurance on the spending account.

According to Morningstar, the best HSAs for savers offer investment strategies in all core asset classes while limiting overlap, provide strong investment strategies that earn Morningstar Medals, charge low fees for active and passive strategies, and don’t require investors to keep money in spending accounts before investing.

The Morningstar report evaluates HSAs available to individuals looking to shop around. It does not consider employer-sponsored accounts, which can vary from the plans offered to individuals.