PLANSPONSOR - April/May 2021 - 24

TOTAL BENEFITS | HSAs
some employers vary the amount based on
an employee's income, with lower-income
employees receiving a larger contribution.
It is not yet common for employers to
do an HSA match, says Nate Black, vice
president, consumer driven health at Voya
Financial in Minneapolis. " The employer
contribution today usually is not tied to
employees having to contribute, " he says.
" But we believe there are many learnings
from the defined contribution [DC} world
that can be applied to the HSA world, and
one thing that really drives participation
in 401(k) plans is an employer match. An
employer match drives a very different set
of incentives for employees, because then
they've got some skin in the game. And we
do think more employers will do an HSA
match in the future. "
Some employers, having seen the power
of automatic enrollment in their 401(k) plan,
are auto-enrolling employees who choose
a high-deductible health plan (HDHP)-a
requirement to be eligible for an HSA-into
one of the accounts. " These employers say to
employees who go into a high-deductible plan,
'Hey, we're going to enroll you in an HSA, and
here's the value in that for you.' Absolutely,
we see many employers take that path, "
Black says. But there is no default deferral, he
notes. Previous Department of Labor (DOL)
guidance has given the OK for HSA autoenrollment.
But it has also indicated that if an
employer wants to keep its HSA benefit from
crossing the line to becoming an Employee
Retirement Income Security Act (ERISA)
plan, an employee's contributions must be
directed by only that individual.
Qualified Plan Advisors has had many
conversations with clients about autoenrolling
employees into HSAs, though
most have yet to do it, Dorfman says. " But
if you want to think about the reason to do
it, you can look at the evolution of 401(k)s
3
1.
2.
HSA EDUCATION
FUNDAMENTALS
Getting serious about HSA engagement also means getting
intentional about communications and education. Start with these
three fundamentals:
Make communication ongoing, not once a year. Mention the HSAs more
than just at open-enrollment time. " The best HSA education views the HSA
as a lifelong benefit, " says Jeff Dorfman, of Qualified Plan Advisors. " Health-plan
education is communicated every year. If you explain the HSA as simply a component
of an employee's annual medical open-enrollment choices, then you're doing a
disservice to employees, because they won't think of it as a long-term benefit. That's
a perspective issue, and you need to shift your employees' perspective. " Employers
communicate about their 401(k) as a lifelong benefit, with education happening
throughout the year, and the same should be true for HSAs, he says.
Offer decision-support tools. " For a certain employee cohort, education
alone is sufficient, and they can self-select the health-insurance option they
think is best for them, " say Nate Black, of Voya Financial. " For another cohort of
employees, education is helpful, but they really want guidance. " Many may feel hesitant
about moving to a high-deductible health plan (HDHP) and HSA, and they want
the input of a knowledgeable person or a tool that helps them determine whether
these benefits will work for them, given their specific circumstances, he says.
Employees often neglect to put time into their annual open-enrollment decisions,
so it is important to make the process easy for them, says Begonya Klumb,
of Fidelity Investments. " Decision-support tools can help employees calculate
which one of the choices will lead to the lowest cost for them and their family, "
she says. A good decision-support tool can estimate an employee's out-of-pocket
medical costs for the coming year with different health plans, indicate the employer's
contribution for the high-deductible plan and HSA benefit, and estimate the
tax savings if the employee contributes to an HSA, she says.
3.
Integrate HSAs into retirement education. It is key to convey that an
HSA is for retirement saving, not just to help with current medical expenses,
says Scott Riordan, of Sentinel Benefits & Financial Group. " HSAs need to be
more and more part of the conversation about saving for retirement, " he says. " For
employers that aren't looking at things in a silo, but at the overall financial wellness
picture, it's important that HSAs are part of that retirement conversation. " -JW
as a guide. " It took about 30 years for employers to move from
widespread skepticism of auto-enrolling into a 401(k) plan to
widespread acceptance of doing so as a best practice to help
employees, he says. " I think employers will need to go through
the same evolution of thought as they did with 401(k)s. The
good news is that this road has been traveled before, and I don't
think it will take 30 years to get there with HSAs. "
24 PLANSPONSOR.COM April - May 2021
Tracking Key Metrics
Employers that want to get serious about improving HSA
engagement need to track key metrics closely. " The first step
is to think about, what are the metrics to determine success? "
Dorfman says. " Employers will need to ask themselves, 'Is this
predominantly a health benefit, or is it predominantly a retirement-savings
benefit?' "
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