Tip 1:  Share the expanded health savings account (HSA) benefits

The Coronavirus Aid, Relief and Economic Security (CARES) Act from 2020 expanded eligible items you can use your health savings account dollars for to include telehealth and over-the-counter drugs and menstrual care products. Make sure your employees know they can take advantage of these new eligible items to help fund upcoming health expenses.

Tip 2: Focus on HSA account education

HSAs are becoming increasingly popular as more companies are offering 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. It’s important that employers provide their 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 out for three reasons:

  • Ownership: The money stays with the employee regardless of the employer
  • Triple tax advantage¹: Tax-free deposits, earnings and withdrawals
  • Saving for the future: After age 65, HSA dollars can also be used for non-health care expenses without penalty – although participants must pay the tax. Accountholders age 55 or older can also make annual $1,000 “catch-up” contributions.

Tip 3: Help employees build financial security

Helping your employees take a proactive, holistic approach toward financial wellness by examining healthcare savings, savings accounts and retirement funding 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

The pandemic, 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 workers. Employers can work to support their people 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 over 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 emergencies, such as financial constraints caused by the pandemic. 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 and how we can help with benefit spending and saving accounts Read more about the state of the industry at 2022 Devenir Mid-year HSA Market Statistics & Trends Report‡.

¹All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. Please check with each state’s tax laws to determine the tax treatment of HSA contributions or consult your tax adviser. Neither UMB Bank n.a., nor its parent, subsidiaries, or affiliates are engaged in rendering tax or legal advice. Withdrawals for non-qualified expenses are subject to income taxes and a possible additional 20% penalty, if you’re under age 65.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

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