Based on experience, I recommend five best practices that can help employers achieve better participation rates, stronger HSA balances and higher employee satisfaction rates. Employers who stick to these guidelines see more than 90 percent of employees open an HSA with their high-deductible health plan compared with only 27 percent at companies that don’t.
1. Plan Ahead
Successfully transitioning to HSA-eligible health plans requires careful planning since they represent a significant change to business-as-usual and are generally unfamiliar to employees.
To reduce stress on your clients’ human resources staff, advise them to allow sufficient time before open enrollment to begin educating employees and introducing the plan: at least six to nine months for large companies; three to six months for mid-size companies. Focus communications on:
- Why the employer is offering a high-deductible health plan and HSAs
- Basic features and benefits of the plan and the HSA
Then, closer to the open enrollment date, provide more details on how to use HSAs – such as account requirements and limits, or calculators to estimate tax savings.
2. Minimize Choices
Human nature being what it is, employees tend to stay in the same plan year after year absent a compelling reason to change – even if their premiums and copayments have increased.
To steer more employees towards an HSA-eligible health plan, employers can minimize plan choices: for example, up to three plan options can be offered by large companies, up to two for mid-size firms and one option for small companies. Some larger employers even make a wholesale replacement – eliminating their PPO and other traditional plans entirely and substituting one or more high-deductible plans with HSAs.
- Offer the HSA plan at a substantial premium savings from any other plans being offered.
- Set the HSA plan deductible high enough to avoid needing to raise it the following plan year to meet the HSA-eligible plan minimum.
3. Train the Trainers
Benefit teams are often too small to conduct a full rollout of an HSA-eligible plan by themselves. Companies experiencing successful rollouts engage the entire HR staff, often using on-site training to build their interest in HSAs so that it, in turn, can spread the word.
This is especially important for companies with multiple work sites. Webinars are a good alternative if on-site sessions are impractical. With your help, employers should provide the trainers with sufficient material and answers to common questions so they can talk confidently in meetings or one-on-one sessions with employees.
4. Contribute to HSAs
This is the single most effective way to get employees to begin committing to a savings plan for their health. Employer contributions motivate employees to contribute their own funds.
You may be surprised to know that the more an employer contributes, the more employees deposit. This one step can greatly increase payroll savings for employers and helps their workers have enough money in their accounts to fund their expenses up to their deductibles.
If your clients can’t afford to make large contributions, advise them that even smaller ones prompt employees to open and fund their HSAs.
5. Tell a Story
A highly effective way to get employees to read benefit materials and increase engagement is to use illustrative, hypothetical examples of how people like them would use their HSAs. Common examples might include a young single person, a married couple with children and empty-nesters.
This helps to humanize a process that can seem technical and complex. Employees should also be encouraged to use the money they typically save in HSA-eligible plans to build up their HSA balances.
It pays to follow these best practices – according to research, 89 percent of employees are satisfied when these practices are followed, compared with only 35 percent when they are not.