With open enrollment season approaching, now is the perfect time to begin having conversations with your employees about their health benefits, such as health savings accounts (HSAs) and the plethora of benefits these types of accounts offer. It can be difficult to explain the ins and outs of HSAs, so be sure to follow the below tips to ensure you and your workforce are in the know and ready.

Tip 1: Focus on HSA account education

HSAs are becoming increasingly popular as more companies offer high-deductible health plans (HDHPs), which can be paired with HSAs, giving employees more options when it comes to their healthcare. Employer contributions are often key to encouraging HSA adoption among employees, so it’s important that employers provide employees with up-to-date information about HSAs and how to best use their accounts. HSAs are one of the best long-term savings options for three reasons:

  • Ownership: The money stays with the employee regardless of the employer.
  • Triple tax advantage: HSAs offer tax-free deposits, earnings and withdrawals.
  • Saving for the future: After age 65, HSA dollars can also be used for non-healthcare expenses without penalty – although participants must pay the tax. Accountholders age 55 or older can also make annual $1,000 “catch-up” contributions.

Tip 2: Share how HSAs can assist COBRA premiums

HSAs offer many advantages your employees might not be aware of, such as how HSA funds can be used to pay for COBRA premiums. COBRA coverage enables employees and their families to keep their current employer’s health insurance for up to 36 months during uncertain life events, like job loss, death of a loved one or divorce.

Tip 3: Help employees build financial security

Helping your employees take a proactive, holistic approach toward financial wellness by examining healthcare savings, savings accounts, retirement funding and COBRA considerations can provide a roadmap to make their hard-earned funds work more for them in times of crisis.

Building an emergency fund for unexpected costs is important to an overall financial wellness plan and a practice that employers should promote. It’s also important to plan for the long-term by encouraging employees to increase their 401(k) contributions if they can, or invest their HSA funds.

Tip 4: Adapt the benefits conversation

Economic turmoil and global conflicts have changed employer benefits faster than ever before and people are looking for flexible financial solutions. For employers, this means communication to employees is vital, so they know the full range of offerings available to them. For most, HDHP and HSAs are a win-win. Both HDHPs and HSAs offer unique savings features and give employees greater decision-making capabilities around their health and savings opportunities.

At the same time, both plans can save employers money. HSAs are set up to help employees manage their money and build savings to fall back on when health emergencies arise, and accountholders can invest their HSA to increase their savings.

Tip 5: Find an effective approach to benefits conversations

Financial stress—aggravated by economic turbulence—is the leading cause of lost productivity, unplanned absences, low job performance and distractions among employees. Employers can work to support their workforce by communicating frequently, authentically and transparently and by providing financial education and training. The key to success is to tailor healthcare information, offering education for specific age groups to highlight and dive into the financial issues faced by those individual sectors of their workforce. When doing so, employers should consider two key factors:

  • A holistic wellness package that includes a mix of high-touch features like access to a financial advisor and low-touch offerings like savings incentives.
  • Benefits that are meaningful and smart—not just for now, but for the long-term.

An HSA is unlike any other savings account because it’s both a spending and savings account and can cushion the blow during financial emergencies. And, while we don’t know what the future will look like, we do know that whatever the scenario, it’s essential that people have a range of benefits they understand how to use.

Learn more about UMB Healthcare Services, which has one of the best HSAs for 2024 among all HSA providers.(Source: Investor Business Daily’s Best HSA Companies 2024 List‡)

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INVESTMENTS IN SECURITIES THROUGH UMB HSA SAVER ARE: NOT FDIC-INSURED · MAY LOSE VALUE · NO BANK GUARANTEE  (copied from another piece, does not have to be capitalized and not yelling at you!)

Funds in an HSA Deposit Account are held at UMB Bank, n.a., Member FDIC