Seeding Your Employees' HSA's

The recent boom in health savings account style health plans has lead to some concern that many employees are not utilizing the plans as they are designed to be used. United Healthcare recently made public a study of 212,000 of their HSA customers that shows a few prominent trends in employee usage of health savings accounts.

While there are many tax advantages to contributing money to health savings accounts, many employees are reluctant to do so because they either don’t understand the benefits or they are not willing to put their hard-earned income towards their health expenses before they occur. This can be a problem for many individuals. Health savings accounts are generally paired with high deductible health plans which can mean high out-of-pocket expenses for employees if they have not planned ahead and utilized their HSA.

One easy way to encourage your employees to actually use their health savings accounts is to offer some type of employer contribution, like seed money for the account. The United Healthcare survey showed that 86% of employees opened an HSA when their employer offered a contribution compared to just 27% when their employer did not. United Healthcare’s survey also reported that nearly two-thirds of all employers offering HSA-type accounts to their employees did offer a contribution.

Source

http://blogs.wsj.com/health/2008/09/19/employees-open-hsas-if-their-bosses-kick-in/