Employers and employees, take note: By offering a tax-advantaged way to pay for healthcare expenses, the Health Savings Account is your secret to better healthcare benefits now and in the future. This sensible option, initially signed into law in 2003, has been a viable option for over a decade, but began to demonstrate its true potential following the passage of health reform laws.
After the Affordable Care Act became law, many employers began to shift employees to a high deductible health plan (HDHP) in order to control premium costs and to encourage smarter healthcare consumerism.
A recent webcast from the Healthcare Trends Institute called “Open Enrollment Planning and the Power of HSAs,” available for download here, took an important and insightful look at the current and future state of HSAs, and how they can be an integral part of open enrollment this year and in the future.
Why HSAs Matter for Employers and Employees
The webcast, which featured insights from William Stuart of Benefit Strategies LLC and Jason Cook of WEX Health aired October 9, 2016 and highlighted trends and topics that benefits managers need to look at during the planning phase of open enrollment, including:
- HSA Tax Advantages for Employers: Aside from the premium savings employers realize when offering an HSA eligible plan, Employers are able to reduce payroll taxes, decrease spending on FICA matching, lower federal and state unemployment taxes and maybe save on workers’ compensation.
- HSA Tax Advantages for Employees: When taking advantage of an HSA, Employees are able to reduce taxable income on average 30% through pre-tax payroll deductions (not to mention the long-term tax advantages of the plans)
- A Brief History of the HSA: Early on the HSA was associated or even misunderstood as an insurance product. For this reason, many employers naturally defaulted to an HSA solution that was integrated with their health insurance carrier. For the health plan, an HSA offering is a non-revenue generating product that offers value in the stickiness maintained with their member. We’re starting to see a small shift in the numbers of HSAs opened through integrated health plan solutions because some employers are recognizing that more of a carrier agnostic solution may be less disruptive to the HSA experience when changing from one health insurance carrier to another.
- How HDHPs Have Pushed Forth HSA Growth: Because HSA growth is a result of the growing trend of offering a HDHP, as deductibles have gone up, HSAs have become a way to improve the situation for employees. According to Kaiser’s latest survey just under 20 million employees were enrolled in an HSA qualified HDHP as of January 2015. When AHIP reports again this fall we’ll most likely see another uptick of 2-2.5 million new HSA eligible individuals.
Learn More: HSAs and Open Enrollment
The full webcast takes a much deeper look into the importance of HSAs now and in the future, and offers an important look at how to push forward the conversation about HSAs further, helping to bridge the healthcare divide and ultimately improve the benefits environment. Click here to watch the webcast replay.