Benefits to bet on: health savings accounts
As the prevalence of high-deductible health plans grows, the value of the plans’ associated health-savings account is growing with it. For employees, HSAs provide “tremendous opportunity to maximize their savings dollars and help them stretch further—which will only become more important as healthcare costs continue to rise,” says Begonya Klumb, head of HSAs at Fidelity Investments. Employees also benefit from tax advantages and as a way to save for healthcare costs in retirement.
Employers who not only offer HSAs, but contribute to them, see even more benefits, including helping employees drive the right behaviors and form the right habits, Klumb says. “Looking at our book of business, we see [employer HSA contributions] as one of the primary factors [that leads] employees to adopt the high-deductible health plan and open the HSA account. For some of our clients who have recently started to contribute to the HSAs, we have seen a more than 60% increase in the number of employees opening the HSA account.”
Moreover, HSA contributions are deducted from payroll on a pre-tax basis that saves employers the FICA (Social Security and Medicare) taxes, she says.