Top Five Tips for Employers to Explain Health Benefits to their Workforce
We are in the midst of a significant public health crisis and at the top of everyone’s mind is their health and the health of their loved ones. Below are five key tips to help employers better communicate health benefit options.
When there’s an unexpected disaster or pandemic like COVID-19, there is already plenty to be concerned about, so worrying about paying for unexpected medical expenses is not something anyone wants to think about – which is why healthcare savings options are extremely important. The Coronavirus Aid, Relief and Economic Security (CARES) Act expanded eligible items you can use your health savings account dollars for to include telehealth and over-the-counter drugs and menstrual care products.
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 can be key to encouraging HSA adoption among employees. It’s important that employers are providing 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 – participants just have to pay the tax. Accountholders age 55 or older can also make annual $1,000 “catch-up” contributions.
Helping your employees take a proactive, holistic approach toward financial wellness by examining healthcare savings, savings accounts and retirement funding can provide them a roadmap to make their hard-earned funds work for them in times of crisis. If your employee is struggling with debt, it’s important to inform them about benefits that are accessible. For example, credit card companies may be willing to offer lower interest rates or delayed payments. 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.
The COVID-19 pandemic has changed employer benefits faster than ever before and people are looking for flexible financial solutions. For employers, this means communication to their 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.
Financial stress—aggravated by COVID-19—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, which ranks fourth in total accounts and fifth in total deposit assets among all HSA providers (Source: 2020 ‡Devenir Year-end 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.
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