More Employers Positioning HSAs as a Retirement Savings Strategy: PSCA

By Ted Godbout | Originally posted on ASPPA

The Plan Sponsor Council of America’s (PSCA) 5th annual health savings account (HSA) Survey of more than 500 employers indicates that more employers are framing HSAs as part of a holistic retirement savings approach and not just a spending account for current health care expenses.

In fact, the 2023 HSA survey—sponsored by HSA Bank—reveals that 4 in 10 (40%) employer respondents indicated that they position the HSA as part of a retirement savings strategy to employees, up by nearly half from two years ago, when the level was at 27%. Note that the findings are based on the 2022 plan year experience. 

And with employers still finding challenges in educating employees and getting them to enroll, employers are borrowing strategies from retirement plan administration, such as automatic enrollment and defaults. 

To that end, 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%) report they automatically enroll eligible employees in an HSA—up by more than 30% in just two years, from 41.5% in 2021 and 35.3% in 2020. 

The survey also discovered an increase in employers using a default or suggested savings rate to encourage greater account funding, rising to 11% of respondents, up from 9% last year and 8% the year before.