As the owner or manager of a business, your responsibilities may include choosing health care benefits that provide the best value for both your employees and your company. As health care expenses continue to rise, health savings accounts (HSAs) are gaining in popularity. You may already know what HSAs are and how they operate, but are your employees as knowledgeable as you are? The Society for Human Resources Management (SHRM) recently publicized a survey by Fidelity Investments that revealed 65% of surveyed Americans who handle health-benefit decisions for their households do not know how an HSA works. In addition, 73% of those surveyed believed that HSAs and flexible spending accounts (FSAs) are “pretty much the same thing”.
With annual enrollment period fast approaching in the fall, it is important to make sure your employees have accurate information available to them and are aware of the similarities and differences between various health benefit options, including HSAs. Employees who decline to participate in HSAs, or who do enroll but make misguided spending decisions like mistakenly believing that HSAs and FSAs are identical and funds must be spent before the end of the year (“Use It or Lose It”), may suffer financial hardships or even forgo medical care. The consequences of these actions could include a decline in job performance and satisfaction, while forgoing medical care could negatively affect or worsen an employee’s overall health and well-being. It is beneficial to both parties involved that employees are well-informed before making a decision that could positively or negatively affect their health and their family’s health.
According to the results of this survey, 65% of respondents who opened an HSA stated they received the right amount of information to make an informed decision. These respondents cited their employer or their spouse or partner’s employer as the most influential source of information that guided their decision to open an HSA. In contrast, of the survey respondents who declined to open an HSA, only 9% stated they were influenced by their employer and 55% of those respondents spent less than 30 minutes researching their options. These results indicate that responsible employers should take advantage of this level of influence and do everything they can to educate and inform their employees about HSAs before the annual enrollment period begins.