The recent COVID-19 outbreak has enlightened many people to save enough money for unexpected medical expenses. With so many losing their jobs and employers being bombarded with lost productivity and higher healthcare costs, financial security has become a huge concern and a matter of stress to both employees and employers. Expanding the HSAs is an effective solution for employees to overcome this unforeseen crisis.
The Health Savings Accounts (HSAs)
Health Savings Accounts (HSAs) were started to help Americans overcome their financial crisis. The HSA schemes allow individuals to fund an account that allows them to fund conditional medical expenses with tax benefits.
For most Americans, HSAs are a powerful and efficient way to save their hard-earned money on medical expenses. And since the HSAs do not come with any limitations or restrictions, the account holders have complete control over their funds. Despite being a popular and effective solution, many employees do not seem to be using the HSAs to its full capacity.
A survey conducted by Plan Sponsor Council of America, a section of the American Retirement Association, in August 2020, concluded that employees are not using many investment options.
The survey had 181 employers who offered HSA-qualifying health options in 2019. According to the collected data from the survey, almost 51.5% of employers were offering health savings accounts as a part of retirement savings options to the workforce. However, the concept and the options were not very clear to the employees.
Compared to 61.4% in 2018, 2020 saw 56.1% of the respondents citing employee education about HSAs is very important and primary concern. Employers agree that they have started to slowly educate and bring awareness to the employees about the HSAs and its related options.
One of the major reasons was found to be the lack of automation features offered by the employers for HSAs, unlike the 401(k) retirement plans that have more automated features. This has affected the opening, functioning, and contributing to the health savings accounts.
Since the health savings accounts are a bridge in between financial and healthcare planning, employers are making sure the employees are well aware of it and its benefits, so they can save on their medical expenses.
Another concern was the amount contributed to investment by the employees. The survey reported that almost 83.8% of the employers were offering investment options towards the employee’s HSA contributions. However, the minimum required balance for the account was at least $1000. Although the employee contribution amount did not change from $2,595 in 2018 to the same amount in 2019, the average account balance was just up by $388 – from $5,239 to $5,627. This indicated that the employees weren’t saving enough.
How Financial Wellness Programs Can Help?
With the primary aim to educate employees and offer them enough options to save finances, employers are looking to provide financial wellness programs as a part of the corporate wellness strategies. Employers can conduct a poll or an employee engagement survey to know what kind of financial services the employees would need to help them make better financial decisions.
- Offer free consultations with financial experts.
- Contribute towards HSAs and 401(K) plans.
- Educate the employees about the various investment options.
- Offer rewards and incentives as a part of corporate wellness programs.
- Healthcare insurance plans with low premiums
With the COVID-19 pandemic still leaving its mark on the growing uncertainties, it is wise for the employers to make strategic decisions for employee health and wellness, along with offering support in various forms, including financial help. A happy and healthy employee engages well at the workplace, and good employee engagement easily reflects in better workplace wellness and organizational productivity.