HSA Participation & Financial Wellness

Enrollment Data: Employees Are Sleeping on HSA Benefits

Acknowledging that the average worker is ill-prepared to pay for unexpected expenses, many employers offer tax-advantaged financial accounts as a way to help their employees cover increasingly high out-of-pocket health care costs. The health savings account (HSA)—which can only be paired with a high-deductible health plan (HDHP)—and the more traditional flexible spending account (FSA) can provide a financial cushion with which employees can more comfortably navigate consumer-driven health care.

HSAs can be especially powerful tools for employee financial wellness, as the funds in these accounts roll over and accumulate interest. If sufficiently funded, HSAs can ultimately act as more specialized 401(k) plans to help employees manage their health care costs during retirement - likely to be in the hundreds of thousands of dollars.

However, based on our recent behavioral research on benefits at midsize employers, HSAs are significantly underfunded.

Between individual and family accounts, we found that employees contributed on average less than half of the maximum amount allowed to HSAs for 2016. Even when employer contributions are added (an average of $620 for individuals and $1,220 for families), the amount is still approximately 40 percent below the limit. This gap represents thousands of tax-free dollars that employees won’t have to help them cover current expenses or save for the future.


If this keeps up, many employees may be in a tight spot financially - a situation that could cause them to delay necessary care, which could lead to worsening health problems that cost much more in the long run. Communicating the value of HSAs and encouraging participation in these accounts could prove indispensable to employee satisfaction and retention in the age of health care consumerism.

See the full results of our one-of-a-kind research. Download your free copy of the State of Employee Benefits 2016, Midsize Employer Edition today!