Whitepaper: 'Learning' Objectives'
What's Holding Back HSAs
Whitepaper by Nevin E. Adams, JD & Jack Towarnicky | ABA HSA Council
Introduction: While December 2019 marked the 16th anniversary of legislation that created Health Savings Accounts (HSAs), many still regard the HSA as a new, untested innovation. And while not exactly a “new” option, many plan sponsors and workers are not well versed in HSA-capable health coverage requirements. Even today, workers with access to an HSA option often misunderstand the opportunity, confusing it with the “use it or lose it” requirements of the better known and more prevalent health and dependent care Flexible Spending Accounts (FSAs). In fact, a recent survey confirmed that only 11% of employees and only 7% of employers surveyed could correctly identify four basic attributes of HSAs.1
Little wonder that 60% of employer-respondents to the Plan Sponsor Council of America’s inaugural survey on HSA design and use said that employee education was their dominant concern about this important health care account.
Employers vying for talent in an increasingly competitive labor market have found that today’s HSA can be a valuable component of an employer’s total rewards/total relationship strategy. The 2019 HSA Survey confirms the growing convergence of health and retirement savings and the continued evolution among plan sponsors who increasingly deploy the HSA as part of their retirement savings strategy – empowering workers to realize the HSA’s full potential.
And yet, even after 16 years, only 26% of plan sponsors that offer health coverage offer an HSA-capable health option.2 Further, many that do offer an HSA-capable health option position it as less valuable than other PPO or HMO coverage options. Clearly, the education challenge also extends to plan sponsors.3 This paper outlines both the opportunities and the education challenges that, a decade and a half later, are still holding back HSAs.