Many companies have shifted to offering a Qualified High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) for employees. Because HSAs are different from Healthcare Flexible Spending Accounts (HCFSAs), which many employees are familiar with, and because they are subject to Internal Revenue Service (IRS) regulations, it’s extremely important to educate your employees for the transition.
Explain key differences between HCFSAs and HSAs
While HSAs have been around for many years, they remain relatively unknown and new for many employees. Many people assume an HSA is like an HCFSA because each can be used to pay for eligible medical expenses. However, it’s important your employees understand the differences so that they can use their HSAs correctly.
Compared to an HCFSA, which is a medical expense account only, an HSA breaches into the world of finance. Here are some of the key differences of an HSA:
- An individual bank account owned by the employee
- Earns interest and can be invested
- Can be used as a savings vehicle
- The account balance rolls over from year to year
- The HSA is portable if the employee leaves the company
We spoke with Greg Fierle, an American Fidelity sales manager about why this shift towards a financial account can be confusing for employees.
“Everyone does finances differently. One teacher may use an HSA one way, while another may use it another way– they may both be ‘right’ but this can scare employees.”
Your employees may lean on one another to help understand how HSAs work, but this can get confusing if they each use it differently.
Start the education process early
The more education an employer can provide, the more employees will benefit. Transitioning to an HDHP can be daunting for employees, so you want to give them plenty of time to consider their options. When you begin the education process early, employees can marinate on their options longer and make the best decisions for their families.
In his experience, Fierle has seen the difference it makes to start the education process early. "The most successful districts are the ones who spend a lot more time educating before, during, and after the transition. One district spent a year and a half before their transition to an HDHP educating employees with their insurance committee.
As a result, they had more than 50% of their employees transition during their first year offering an HDHP with an HSA.”
Offer multiple education options
The moment you decide to offer an HDHP with an HSA, it’s time to create an education game plan for employees. Mandatory meetings and multiple education opportunities ensure employees will receive the information they need to make a decision. Group or individual meetings, online resources, and individual Q&A sessions are all other great types of educational opportunities.
One interesting tactic a school district implemented was a “Professional Development Day” where school employees could choose educational sessions and breakouts to learn about a variety of topics, similar to a conference. American Fidelity offered sessions on HSA management and best practices and had great attendance! We presented online tools such as our HSA eligibility list, walked through the claim filing process, and discussed common IRS compliance rules.
After employees choose an HSA, employees may need assistance using their accounts, so providing further education throughout the year to address confusing topics can help with employee satisfaction and may increase future participation.
At American Fidelity, we provide the following opportunities throughout the year for our customers at no additional charge:
- One-on-one meetings
- Presentations to your committees and/or union leaders
- Evening meetings so spouses can attend
- Professional development classes
If you want to learn more about HSAs and how to help your employees make the best decisions for their families with qualified High Deductible Health Plans, contact your local account manager.
HSAs can be confusing, but we’re here to help. Learn more, here: