How to Talk “HSA” in a Language Your Employees Will Understand
Health savings account (HSAs) offer unrivaled flexibility when it comes to managing health and wellness, allowing account holders to spend, save or invest. However, this flexibility means one-size-fits-all communications about HSAs simply don’t work, because HSA account holders aren’t all the same. From C-suite executives to front-line staff, employees are drawn to HSAs for different reasons, and their thoughts and questions regarding HSAs vary widely.
Based on 15 years of behavioral data and account holder input, HealthSavings has identified distinct categories of HSA account holders found in many employee populations. Below, we offer information on four of the most popular personas with key messaging employers can use to ensure they talk “HSA” in a language that employees will understand.
Steve, the Newcomer, is 26 years old, single and selecting his health benefits for the first time. He spends a lot of time at the gym, so he is generally healthy and doesn’t need to go to the doctor often. Steve is just starting his career, so with an entry-level salary, it’s important for him to keep a close eye on his monthly expenses. That means he doesn’t want to pay a high health plan premium and has instead selected an HSA-qualified high-deductible health plan.
What does Steve need to know in order to get the most out of his HSA? First, that he can pay for qualified expenses tax-free using his HSA. For quick reference, he needs a link to understand what expenses are qualified. Second, now is the ideal time for Steve to start saving for future medical costs using his HSA. The best way for him to do that is select a small automatic deduction from his paycheck (even $10 a pay period is a great start). Third, Steve should be given an easy flyer reminding him that his HSA funds don’t expire at the end of the year like FSA dollars do. He never has to worry about losing his HSA funds if he doesn’t spend them; those dollars will be there for him when he needs them.
Lori, the Budgeter, is a single mother with two young children who are her pride and joy. She works as an administrative assistant in a doctor’s office, and with an admin-level salary, she makes sure each dollar works as hard for her as it can. She chose an HSA-qualified health plan because the premiums were lower, but she’s worried about covering the out-of-pocket costs for doctor’s visits and other medical costs her children might incur.
For Lori, understanding how HSAs can help stretch her dollars farther can help her make best use of her HSA. When Lori needs to spend money on medical care, she can make a tax-free contribution for that amount into her HSA, then withdraw the funds tax-free when she pays. That way, Lori’s HSA helps her save money twice. Lori also needs to understand the wide range of qualified expenses she can pay for using her HSA like sunscreen, cold remedies and fever reducers. A seasonal flyer listing qualified expenses will help her save even more. And like Steve, Lori needs to know that she is never required to spend her HSA dollars before she chooses and that her account stays with her even if she changes jobs.
Taylor, the Provider, is about to turn 40, or as he calls it, the new 30. Taylor has a spouse and three children and is moving up the ladder at his job. Between soccer practice and piano lessons, there’s not a lot of spare time, so Taylor prioritizes getting time back in his day. The family’s annual income allows him to begin focusing on how to prepare financially for the future, and he’s learning more about investing. He thinks having an HSA would be beneficial for his family but is a bit worried about the deductible of the HSA-qualified health plan.
HSAs are perfect for Taylor’s situation because they can help him save money now and in the future. HSAs allow him to pay for so many of his family’s medical expenses tax-free, including braces, glasses, and much more. Additionally, HSA funds can be invested to cover down-the-road healthcare costs, giving him a simple, tax-advantaged way to prepare for the future. A quick flyer with HSA investing details will help him make informed decisions about growing his HSA funds. Also, Taylor can contribute to his HSA each year until that year’s tax deadline, giving him time to sock away some of his annual bonus. Taylor can save precious time with an HSA, because it’s flexible enough for all his family’s needs.
Having worked her way to an executive level in her company, Michelle the Planner is counting down the days until retirement as sandy beaches call her name. She and her husband are empty nesters and are financially focused on creating a comfortable retirement, as well as estate planning. Michelle is a seasoned investor and understands how to make her money work for her; she also knows that her medical expenses will probably be increasing as she gets older. She likes the idea of an HSA for its investing ability but isn’t sure how it should fit into her retirement portfolio.
For Michelle to get the most out of her HSA, she needs to understand how HSAs can help her pay for the medical expenses she and her husband will incur in the future. An easy side-by-side comparison of 401(k)s, IRAs and HSAs will help her remember that while 401(k) funds withdrawn for healthcare costs are taxed, HSA dollars can be used tax-free. This allows Michelle to prioritize her withdrawals to make best use of her various accounts’ tax advantages. Michelle also will be helped by learning about HSA catch-up contributions, which allow account holders 55 or older to put in an extra $1,000 each year. And finally, Michelle should be aware that, by paying for current medical expenses out of pocket, she can build a stockpile of untaxed HSA funds she can use to reimburse herself tax-free at any point and spend as she chooses.
Customized HSA communication tailored to employees’ specific needs and goals is the key to helping each employee get the most out of their HSA. By meeting employees where they are with targeted HSA education, employers can maximize HSA adoption and support their employees in creating happy, healthy futures. Looking for an easy, comprehensive HSA offering for your employees? Learn more about our best-in-class solution here.