Are you looking for ways to effectively and efficiently control your healthcare costs while still offering competitive and attractive benefits programs for your employees and helping them understand their options?
Health plans, employers and Health Savings Account (HSA) administrators continue to face the challenge presented by employees who do not understand how their health plans and HSAs can work together for their benefit.
Employers and employees at companies of all sizes have realized cost savings from pairing a High Deductible Health Plan (HDHP) with a tax advantaged Health Savings Account (HSA).
While both employers and employees typically benefit from lower premiums with an HSA-Qualified Health Plan, it is also important for employers to help employees prepare for their greater responsibility and decision-making roles in how their healthcare dollars are spent.
Employees struggle with knowing when to spend or save money in their HSA. Generally, employees aren’t willing to sift through pages of traditional printed brochures, FAQs and user guides to gain insight into HSA features and benefits. Therefore, there is a gap in education about HSAs, and when employees don’t understand the full power of these accounts, the result is under-utilization of available programs and tools.
These questions and answers should help educate you and your employees about these valuable programs and understand how to take advantage of the benefits.
Q. What should I look for in an HSA administrator?
Look for an experienced financial institution that has been in the forefront of HSA administration.
You’re in the business of running your business. Choose an administrator who can help you manage the education, enrollment and contribution processes without adding to your administrative burden.
Employees who establish HSAs usually have distinct needs and typically fall into three categories: spenders, savers and investors.
Choose an HSA administrator that offers an FDIC-insured interest bearing cash account along with an integrated HSA investment account option to help meet the needs of all your employees.
Accessing account funds in convenient, familiar ways is important. Pick an HSA administrator that offers debit cards as part of their standard offering. Look for other convenient and digital ways to make payments that add value to the employee experience.
Today’s healthcare consumer is on the go, all the time. Seek out HSA administrators that offer a robust mobile application.
Q. How do I manage my HSA program?
The employer experience should provide easy-to-use options for educating and enrolling employees and making payroll and/or employer contributions right from their desktop. An integrated, robust platform is key. The portal should provide:
- An automated enrollment tool to upload demographic/enrollment files containing employee enrollment information.
- The ability to add a single employee or a series of employees to your program using a simple, intuitive web page.
- A dedicated specialist to help with implementation and a knowledgeable team for ongoing administrative support.
Q. What type of tools do my employees need to manage their HSAs?
Look for an administrator with a state-of-the art website designed specifically for managing healthcare spending. It should enable:
- Complete, intuitive account management, including robust notification options.
- Self-service for distribution options, including online bill pay and the ability to electronically reimburse oneself to a personal bank account.
- An online tool to enable employees to consolidate, track and categorize expenses online and budget for annual healthcare expenses.
- An integrated mobile app that allows employees to manage their expenses on the go.
- A debit card that can be used to pay for qualified medical expenses.
- A dedicated and experienced service team available toll-free with extended hours.
Q. Should my employees have investment options to grow their accounts?
Employees should understand their ability to direct a portion of their account balance into a selection of investments that allow “HSA savers or investors” to put aside funds for retirement spending needs or future qualified medical expenses.
Q. As an employer, can I control how my employees spend their HSA funds?
No. HSAs are individually owned, and employees have full ownership and control of contributions to their account as soon as the funds are deposited (in the same manner that their wages are deposited to a personal checking or savings account). Employees are responsible for confirming any account funds are spent on qualified medical expenses according to IRS guidelines.
Q. Who is responsible for paying service fees that may be incurred on the HSA?
Employers should have the option to pay any monthly administrative fee on behalf of their employees or choose to have any application monthly administrative fee charged against the employees’ account balance. When the employer pays the monthly administrative fee, employees in high turnover positions – such as property managers – may see added value in their current position.
Q. What happens to an HSA if an employee terminates from the company?
HSAs are individually owned accounts and are portable; therefore, former employees keep their accounts, and any funds in the HSA can be used to pay for qualified medical expenses.
Q. I have an existing HSA program with another administrator. How can I transfer my programs, and can my employees transfer their HSAs?
Your chosen administrator should offer experience in transferring existing HSA programs, minimize the impact on your employees and assist in providing the necessary Direct Rollover/Transfer Request Form and instructions for your employees. Pick an administrator who is skilled with taking over existing programs.
Q. I offer my employees other benefit spending accounts, such as flexible spending accounts (FSAs). Can they be administered by the same entity?
Yes. It’s possible for the full suite of employee benefit spending accounts, including Health FSAs, Dependent Care FSAs, Health Reimbursement Arrangements (HRAs) and other benefit spending programs such as transit accounts, to be administered through the same employer portal. Your employees can benefit from viewing and managing their accounts in one location and accessing available account funds on a single debit card.