Fidelity found a 48% increase in HSAs opened during 2013 compared with 2012 as more and more companies offer the tax-advantaged accounts together with high-deductible health plans (HDHP). Fidelity, which itself administers HSAs, found HSA-related assets increased 39% in 2013 to $653 million, from $471 million in 2012.
“We believe one of the best ways for people to prepare for the escalating costs of health care in retirement is, if eligible, open a health savings account, as young as possible, to make the most of possible long-term investment gains and tax-advantaged growth,” says Will Applegate, vice president, Fidelity Investments, based in Boston.
Applegate notes that tax-advantaged opportunities for near- and long-term qualified medical expenses, plus the ability to carry-over balances year-to-year, are factors that help drive account holder growth. For companies, he suggests that offering a HDHP with an HSA could help them avoid the looming “Cadillac Tax,” a fee for high vlaue coverage in excess of a financial threshold described in the Patient Protection and Affordable Care Act and slated to take effect in 2018.
In terms of how to effectively communicate information about HSAs to employees, Applegate points to the example of Marathon Oil Corporation, an energy company based in Houston.
Working with Fidelity, Marathon made use of print materials, workshops, videos and staff meetings to educate its employees about HSAs. Efforts also featured a benefits expo at the company’s headquarters, as well a new online Health Plan Modeler tool to help employees compare health plan options under different usage scenarios.
As a result of these efforts, three-quarters of eligible employees attended workshops, two-thirds attended the expo, and 40% used the Health Plan Modeler tool.
More information about HSAs is available here.