Thought Leadership in Action

Nearly half of all employees enrolled in health savings accounts (HSAs) in 2017 did not contribute any of their own money to these tax-advantaged accounts, and are thus missing out on an opportunity to reduce their out-of-pocket health care costs and potentially save for retirement, the findings of a survey conducted by human resources solutions company Willis Towers Watson suggest.

Healthcare

The survey of 698 U.S. employers was carried out between June and July 2017, and reflects respondents' 2017 health program decisions and strategies. The results showed that nearly three-quarters of employers (73%) are currently offering their employees a high-deductible health plan tied to an HSA, and that the share of employers offering HSAs is expected to rise to 83% by 2019.

The findings also indicated that of the employers that currently offer HSAs, a majority (62%) are encouraging greater employee participation by contributing seed money to these accounts. The survey found that in 2017, median seed amounts ranged from $300 to $750 for employee-only coverage and $700 to $1,400 for family coverage, depending on whether employers offered automatic seed money or automatic plus "earned" seed money. However, the results also showed that 43% of the employees who were enrolled in an HSA in 2017 made no contributions to their account.

Researchers offered employers three tips on how to encourage more employees to contribute their own money to HSAs. First, they recommended, employers should communicate with employees early and often—and through multiple vehicles—to make sure employees understand the tax advantages and versatility of HSAs. Second, researchers advised employers to seed HSAs with automatic or earned money to incentivize them to enroll in high-deductible health plans and contribute their own money to their HSAs. Third, they recommended that employers provide employees with decision support tools, including financial well-being tools that help employees estimate the tax effects of HSA contributions, their current and future health care costs, and their longevity needs.