Healthcare and health insurance costs continue to rise, with employers expecting insurance costs to jump 8.2% in 2027‡ and consumers seeing cost increase for prescriptions, preventative care, specialists and more. In fact, the AARP’s Public Policy Institute recently reported‡ the top 25 name-brand medicine brands increased prices by 81% since entering the U.S. market.
These rising costs are impacting employers and consumers alike, making benefit adoption and optimization even more critical. As you consider your strategy for supporting benefit growth, retention and use, consider the composition of your workforce. Starting this year, we have six generations potentially in the workforce, some of which are starting their first jobs as teens, and others are holding onto income in late-stage retirement.
How can you, as an employer, help educate and empower employees to pay their current medical bills, while encouraging younger workers (who may be living paycheck-to-paycheck) to save and older workers (who may have extra cash on hand) to invest? While this might sound daunting, you may already offer one of the most valuable benefits to employees at any career stage: a health savings account (HSA).
Many employers offer medical plans paired with HSAs, and enrollment has been ticking up steadily, with 88% of employees enrolled in an HSA-qualifying health plan having an HSA, according to the Plan Sponsor Council of America’s 2026 HSA survey results‡. Of those enrolled, 82.5% contributed to their HSA in 2025.
These numbers suggest that HSAs are becoming a well-known option for healthcare spending and saving, with contribution increasingly gaining ground. That said, employers should not sit back and coast on this growth; instead, continue to encourage employees to enroll and contribute. Employers can educate their participants on a “pay for healthcare now while saving for retirement later” strategy and actively market the HSA to their workforce as each new generation enters the market.
Your HSA education program
Education and communication are critical because both have a significant impact on employee engagement. Begin by explaining the basics and the advantages that an HSA offers, including:
- An HSA is paired with a qualified high-deductible health plan (HDHP)
- They’re both a savings and spending account
- It’s a triple-tax advantage[1] account:
- HSAs are 100% portable, owned by the employee
- Funds can be used now or at any time in the future —healthcare now, retirement later
- Once the account reaches a certain balance, employees can invest their funds
- Paying for qualified healthcare expenses with tax-free money allows employees to stretch their paychecks and pay for expenses they may not otherwise be able to afford, such as a second set of glasses or orthodontics.
- Employees have to cover medical expenses anyway for doctor visits, dental care, and vision care. So why not save money with a tax-advantaged HSA?
Meeting each generation where they are
Understanding that each generation consumes information and learns very differently is critical. Tailoring your approach based on each generation’s unique attributes is a major key to an overall successful program. There are some general trends within each of the generations currently in the workforce:
The Silent Generation
These employees were born between 1925 and 1946. This generation typically underestimates the amount of health care expenses they may incur post-retirement. Since they’re the least likely to ask for guidance, members of this generation would benefit from individualized support to help them build financial security.
Baby Boomers
This generation includes employees born between 1946 and 1964 and is unique in that they were mid-career when traditional pension plans and the retirement landscape started changing. They were the last generation that expected a pension as well as one of the first generations to use Flexible Spending Accounts (FSAs). Also, most didn’t start planning for retirement until they were older, around age 35. Employers can help by explaining:
- HSA features and long-term benefits.
- How an HSA is different than an FSA. HSAs are consumer-owned bank accounts. Funds in the account belong to the employee, no matter if they change employers or insurance plans.
- How by investing their HSA balance now, they can grow the money in their account to use when they do decide to retire.
Gen X
These employees were born between 1964 and 1980 and are the first generation to rely on saving for retirement in a 401(k) plan. Also, like Baby Boomers, they are one of the first generations to use FSAs. Like Boomers, Gen Xers may not fully understand how to maximize their HSA funds because they still have the FSA “use-it-or-lost-it mentality.” Given this, it is important to:
- Educate these employees about an HSA’s features and long-term benefits.
- Explain how an HSA is different than an FSA.
Millennials
This generation includes employees born between 1981 and 1995. You can better help Millennials save more money for retirement by reinforcing the HSA’s features and long-term benefits.
Remind them that the HSA is a spending account as well as a savings account and that it has triple-tax advantages. In addition, emphasize how Millennials can take advantage of compounding interest by investing the money they don’t spend on healthcare expenses now, so they have more money for when they retire.
Gen Z
These employees were born between 1996 and 2012. While most Gen Zers contribute to their company 401(k), they’re not thinking about how much money they’ll need when they retire. Plus, they don’t understand how an HSA works. The good news is that Gen Zers are the equivalent of a blank canvas. This means employers can focus communication not only on the tax benefits of an HSA and how to use it to pay for healthcare expenses now, but also how to invest the money for retirement later.
Gen Alpha
These individuals are just beginning to enter the workforce and, while the birth year range varies by source, the general timeframe is those born roughly between 2010 and 2024. This generation is growing up immersed in technology, with ubiquitous smartphones and internet culture, in addition to living through key cultural events like the covid pandemic. The habits, goals and future plans for this generation are evolving day by day, so the keys to this generation are active listening, trends watching and ensuring communication is offered digitally.
Keep the conversation open, fun and continuous
Make open enrollment and HSA education engaging — even fun. Be creative: raffles, employee events, games, contests, scavenger hunts and other activities make enrollment and education more engaging. People learn better when they’re engaged.
Keep the conversation going, even after open enrollment. Communicate year round with employees who enrolled in the HSA plan as well as with those who didn’t engage. Your medical carrier and HSA administrator can help, with ideas about shopping for quality care, how to read an Explanation of Benefits statement, how an HSA fits into a long-term savings strategy, how to invest HSA funds and more. Strategize with them so that messaging is reinforced and complemented, rather than simply duplicated.
Connecting with employees across generations on any topic is challenging, but particularly so when it comes to managing healthcare costs and retirement savings – and the role HSAs play. Maintaining a consistent cadence of communication, understanding your audiences, and connecting with them where they are will go a long way in helping your employees meet their vast and varied healthcare and savings needs.
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 in the 2025 Devenir Midyear HSA Market Statistics & Trends Report‡
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[1] All mention of taxes is made in reference to federal tax law. Neither UMB Bank n.a., nor its parent, subsidiaries, or affiliates are engaged in rendering tax or legal advice and this document is not intended as tax or legal advice
[2] 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.
[3] INVESTMENTS IN SECURITIES THROUGH UMB HSA SAVER ARE: NOT FDIC-INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Funds in an HSA Deposit Account are held at UMB Bank, n.a., Member FDIC
