Healthcare is stressful enough. Paying for it shouldn’t be.

6 Ways to Ensure Success in Providing an Health Spending Account

It’s a competitive environment out there as businesses like yours are trying to find and retain employees. Are you considering the possibility of providing an HSA as a way to retain your incredible employees? It is no secret that your employees are your most valuable asset. You want to attract and retain the very best. One of the most valuable things you can do for your employees (and future employees) is offer great health benefits. Providing an HSA as a part or as a replacement of a strong benefits program helps employees confidently engage in their health decisions, leading to better health and happiness. And in turn appreciation for you as a part of their healthy life choices and outcomes. They benefit and so do you with higher engagement and productivity at the same time as lowering turnover, lowering hiring/training costs and lowering overall benefit costs. 

However, simply deciding to offer an HSA and ultimately providing an HSA is not enough. Your employees have to have a solid understanding of what is offered and how to use the benefits provided. In addition, as an employer, you want to ensure your plan offered is right for everyone involved – as well as your bottom-line. So, how can you make your plan as effective as possible? Here are six simple but powerful ways to ensure you have success providing an HSA in your business: 

1. Define your goals 

You wouldn’t start a new product-line in your business without appropriate research and planning. Same goes for a an HSA for your employees. Before thinking about your health plan deductibles and out-of-pocket maximum, etc., fully understand and define what you are trying to achieve. What do you most want to get out of providing an HSA to your team? Are you trying to attract new employees in a competitive workforce environment? Or maybe your end goal is to increase employee engagement? Is it as simple as a cost savings initiative for your company? Or a combination of both?  

2. Solicit input from your employees 

What benefits do they want? It’s very realistic that employees at different stages of their work tenure want different things from their health benefits. The flexibility of an HSA allows each employee their own level of uniqueness. A 2018 American Health Insurance Plan study found that 56% of employees surveyed would stick with an employer because of the benefits they receive. Employees don’t want canned coverage that offers only one or two choices. They want to pick the coverage options that will best serve their needs. They also look for ways to minimize out-of-pocket costs. However, providing an HSA may fall short for a large portion of your team as  they may come back and inform you they value wellness expenses higher than health expenses. Your employees may benefit from a Wellness Spending Account (WSA) instead (or as well as). Or, maybe there is a mass spectrum of employees wanting some level of health AND wellness, you can provide a flexible spending account (FSA) that allows employees to use their allocated spending account funds in either bucket with ease. 

3. Provide benefits employees can tailor to their needs 

You asked for their input. Now deliver on it. HSAs and WSAs put the spend decision in the place where it belongs – in the hands of your employees. By providing an HSA to your employees, you allow them to decide what is important to them.  

4. Educate employees on what their HSA can be so they can make smart choices 

Lets say you installed a foosball table in the employee lounge but nobody ever played it. Maybe only a handful of your team understands how to play it. What good is a benefit you provide that never gets used or not used properly or that is not understood? We are not saying a foosball table is on the same level as your employee’s health benefits but it is only a perk if it is used. As an employer, you want to ensure your employees understand and get the most benefit of all the compensation elements you provide them in your Total Compensation Package. It starts with salary, and pension opportunities, but also includes health benefits, flexible work spaces and time off as examples.  

A recent HSA Bank study found that only 10% of employers believe employees understand their plans. Workers often are confused about the terms and covered services. Over 80% of employees spend less than an hour getting to know their benefit choices. As an employer, you need to invest time in educating/communicating with employees to ensure they understand their HSA (and possibly WSA) choices, allocations and timeframes. Provide a list of available health expenses they can use their HSA for. Select and provide a list of allowable WSA expenses for your team. Use examples wherever possible. Ensure they know the level of funding they have for health spend allocation, wellness spend allocation and what the difference is. Ensure they fully understand what the fund allocation/spend/reimbursement process is. Where they may need out-of-pocket spend and reimbursement versus instant pay from your plan. Ensure they know when their current allotment of health and wellness funds expire and what happens to those funds. Are they carried over to the next year? Are they lost and re-topped up to new year amounts? The employee must understand all elements of their flexible HSA so it is always perceived as the benefit it really is.  

5. Help employees do the math 

Providing an HSA as is a solid way for you to show you have confidence in them. Give them confidence in you and the total compensation package you offer. Their salary is only one part of their compensation exchange for their skills. A tax free HSA allows them to use full allocated funds and not be taxed on it. For example, using combined provincial and federal tax of 25% and the employee having a $2000 HSA, it would represent $2500 in actual value. Share easy-to-use tools and/or calculators to help employees understand the numbers. Provide benefits that have a simple cloud-based app for all HSA tracking is a great way for them (and you) to always know balances, etc.  

6. Make usage as seamless as possible 

Some HSA plans force employees to use preferred practitioners and health vendors. In addition some make the employees pay upfront with their own out-of-pocket funds to pay for the health expense. Sure they get reimbursed anywhere from 2-21 days later but that means those dollars can’t be used for other household expenses during the time waiting to be reimbursed. With a prepaid health and wellness solution such as our ayaHSA Prepaid Mastercard® Card solution, your employees never have to make a choice between a prescription being filled and putting food on the table. Your should also look for an HSA solution that is fully integrated into a handheld app for to-the-minute reporting on balances, transaction amounts, etc.  

Your Health and Wellness Insights  

These six strategies will help to ensure your business succeeds in your employee health benefit decision and providing an HSA to them. HSAs are effective for almost all employers and may lead to significant net rewards for your employees and your company, too. They let your employees know you’re looking out for their best interests. As you plan, don’t feel like you have to revolutionize your plan in the first year. Re-assess each year with the insights you continually gain from providing an HSA to your team. Most importantly, communicate with your employees. Not just at enrollment or end of year but all year-round. This will keep employees engaged and show them they’re supported. If you need assistance in deciding how an HSA could benefit your business, contact HSA and book a demo today.