PLANSPONSOR - April/May 2019 - 6

Survey Says
HSAs for
Retirement
Saving
F
orty-seven percent of plan sponsors
that responded to the
2018 PLANSPONSOR Defined
Contribution (DC) Survey offer their
employees access to a health savings
account (HSA). With the triple-tax savings
opportunity, HSAs can provide clear
advantages to those who save in them, yet
it is unclear whether employees know how
to best prioritize their savings across a
retirement plan and an HSA to maximize
the opportunity.
We asked readers whether they think
it is feasible to expect employees to save
in HSAs for the long term. The largest
percentage of respondents (44.9%) said
it is not. Twenty-nine percent said it is
feasible if using the right savings strategy,
while 24.6% simply said, " Yes. " A small
percentage (1.4%) selected " Don't know/
No opinion. "
Many responding readers said it is
feasible only for higher-paid employees,
noting that many workers struggle to save
in their retirement plan. A few readers
pointed out that, because HSAs are still
tied to high-deductible health plans
(HDHPs), any savings will first be needed
to cover the deductibles and other out-ofpocket
health expenses.
As always, all verbatim responses
reflect the opinions of individual readers
and not the stance of PLANSPONSOR or
its affiliates at Institutional Shareholder
Services (ISS).
" Our young team members get an
employer contribution to the HSA and
typically don't use all of the assets in a year.
Over time, they should be able to save quite
a bit if they stay healthy, but I am not sure
6 PLANSPONSOR.com April - May 2019
29% of respondents
said it is feasible
to save in HSAs
long term, if using
the right strategy.
it will last into retirement. "
" It could work if employees are properly
educated on how it works and the benefits of
an HSA. "
" If possible, it is best to max out on your
HSA contribution regardless of the expected
amount of expenses. "
" Plan sponsors must allow for continuing
messages to keep the 'saving' portion of HSA
front of mind. "
" It's feasible for your highly paid
employees. But your highly paid will likely
not elect a high-deductible plan, because
they can afford the premiums for a more
robust, low-deductible plan. "
" An HSA provides three tax advantages:
1) contributions are tax-deductible, or
pre-tax if made through payroll deduction; 2)
the gains earned are tax-free; and 3) account
owners may make tax-free withdrawals for
qualified medical expenses. No other savings
vehicle gives you those three advantages. "
Art by Melinda Beck
" If employees are utilizing the HSA
correctly-i.e., being a smart consumer to
lower medical costs-it's definitely possible
to use the HSA as its name implies, as a
savings account. "
" There are too many things to save for.
Everyone, no matter how much you earn
or what type of health care plan you have,
should be able to have an HSA, but figuring
out which buckets should have priority is a
concern. "
" If people can't keep their money in
a retirement plan already, how is adding
another venue for accessible money going
to help? The amount of loans/hardships
processed shows that people need those assets
for things such as medical bills and visits. "
" If individuals start funding their
HSA in their 20s, when they typically have
minimal medical expenses, their account
will grow over the decades. "
And the Editor's Choice goes to the
reader who said: " For employees who can/
will invest in an HSA and not use it for
current medical expenses, it's a marvelous
opportunity to accumulate wealth in the
most tax advantaged way possible. "
-Rebecca Moore
You can participate by subscribing to
NewsDash at plansponsor.com/subscribe.
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PLANSPONSOR - April/May 2019

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