Study: 35% of employers offering HSAs say half of participants use up their balance
- Plan Sponsor Council of America's (PSCA's) HSA Snapshot survey shows 75% of employers see health savings accounts as part of their retirement savings plan offerings, PLANSPONSOR reports.
- The survey also found that, while 40% of survey respondents said 25% or less of plan participants use their HSA balances, another 35% of respondents said as many as 50% of participants use up their balances each year. The average balance cited was $3,161.
- Most respondents (60%) believe HSAs should replace flexible savings accounts (FSAs), and 75% think HSAs should be available to all employees and not just participants in high deductible health plans.
HSAs offer tax incentives and allow account holders to contribute to them as they would to their retirement plans. That’s probably one reason HSAs are popular with millennials, according to a Benefitfocus study.
Republican lawmakers have been promoting HSAs as part of their plan to revise the Affordable Care Act. Their last attempt at reform would have raised the maximum contribution limit on the amount employers are allowed to contribute to employees' HSA plans, a move employer advocates generally described as positive.
Democrats, however, oppose HSAs, which they say favor affluent plan participants. That viewpoint, combined with the high cost of healthcare, might explain why nearly half of employees in PSCA's survey exhaust their plan balances each year.
Employees must understand how benefits work and which ones will best suit their needs, both personal and financial. Employers can help by providing employees with detailed information on all benefit offerings, including costs, advantages and drawbacks.