Helping Employees Enroll in HSAs

More employers are automating HSA enrollment according to new survey from PSCA

Arlington, VA (Nov. 9, 2023) – The Plan Sponsor Council of America’s (PSCA) 5th annual Health Savings Account (HSA) survey of more than 500 employers reveals these accounts are continuing to gain in popularity while exploring trends in how these accounts are positioned by employers and used by employees. The 2023 Health Savings Account Survey, sponsored by HSA Bank, indicates that these programs are becoming more sophisticated and robust, though employers still find challenges in getting employees to enroll in the program, and educating them about the benefits of HSAs.

Half of employers note that getting employees to open an HSA after enrolling in a qualifying health plan is a challenge. To address this, nearly half of organizations (46.7 percent) report they automatically enroll eligible employees in an HSA – up by more than 30 percent in just two years. The survey also discovered an increase in employers using a default or suggested savings rate to encourage greater account funding (11.0 percent of respondents, up from nine percent last year and eight percent the year before).

In addition to employing strategies borrowed from retirement plan administration such as automatic enrollment and defaults, more employers are framing HSAs as part of a holistic retirement savings approach and not just a spending account for current health care expenses. More than 40 percent of employers do so, up by nearly half two years ago (27 percent).

“Concern for employees being able to fund their HSAs is growing among employers as the economy continues to struggle with higher costs of living, and many are putting supports in place to help,” states Hattie Greenan, director of research and communications, PSCA. “Employers see the benefits of HSAs to help employees cover health care expenses now and in the future and are structuring their programs to help employees do so.”

Additional findings from PSCA’s 2023 HSA Survey include:

1.     Participation: Nearly 90 percent of eligible employees had an HSA in 2022 with 80 percent making contributions to it, up from 72.8 percent in 2021.
2.     Employer Contributions: Three-quarters of employers make contributions to the HSA. Most provide a set amount per coverage level.
3.     Investments: Sixty percent of responding organizations offer investment options for HSA contributions, though most participants choose not to use this option – 70 percent of all HSA assets remain in cash.

Though investing HSA assets is a great way to grow account balances, most employees are either hesitant or unable to do so with fewer than 20 percent of employees investing assets when offered the opportunity.

“The cost of retiring continues to grow as health care becomes more expensive and it’s critical that employers incorporate HSA investment education into retirement and financial planning programs,” said Ann Brisk, senior director of innovation and strategy at HSA Bank. “This new research highlights the opportunity to educate employees about the benefits of HSAs as an investment account and change the perception of how these accounts can be used to empower consumers to think holistically about long-term financial planning, especially during open enrollment season.”

The survey can be accessed at https://www.psca.org/research/HSA.

Insights on how employers can use these survey results to design their benefits plans will be shared in a webinar hosted by PSCA and presented by HSA Bank on Wednesday, November 15. Learn more here.