Fewer Than Half of Private Employers Offer HSA Alongside HDHP
It’s like having a PB&J without the bread—doable, but far less palatable. And potentially a little messy.
Yet many employees are choosing their employer’s high deductible health plan (HDHP) without signing up for its counterpart, the health savings account (HSA). That may be because they were never offered one.
According to the fourth annual “Guardian Workplace Benefits Study,” only two in five private employers offer an HSA alongside their HDHP.
An HSA allows accountholders to set aside pretax dollars to cover eligible medical expenses. Without an HSA, HDHP subscribers miss out on valuable tax savings as well as opportunities to save and invest any unclaimed dollars for the future. Worst case, without an HSA, subscribers struggle to plan for adequately covering their share of the deductible.
But what many consumers don’t realize is that, even if their employer does offer an HSA, they’re not beholden to that option. While pairing HDHPs with HSAs offers employees some level of convenience, HSAs are individual, personally owned accounts. That means accountholders have every right to choose who administers their account even if they’ve earned their HSA eligibility by enrolling in their employer’s qualified health insurance plan. Every HSA-eligible individual is a free agent. In fact, 40 percent of HealthSavings Administrators’ HSA accountholders are not associated with an employer group.
So a lack of employer-sponsored HSA plans isn’t necessarily a dead end for HDHP subscribers, as long as those subscribers understand they have options.
But the reality is that many employees don’t know what they don’t know. And after sifting through the onslaught of open enrollment forms and materials, few have leftover time to poke around the Internet for guidance on whether they’re eligible for an HSA. Ideally, employers as well as financial and benefit advisors need to offer this important information throughout the benefit year and use the open enrollment meetings as a reminder and call to action.
Whether or not an employer offers an HSA for their HDHP subscribers, they owe their employees information about HSAs. Ideally, it would be presented as part of every discussion focusing on financial planning. Otherwise they’re leaving out an important piece of the financial wellness puzzle.