Health Savings Accounts

Many companies now at least offer a high deductible health plan option and nearly a third of employees now have a HDHP. The number of HSAs has grown as well. In 2016 Devenir Research reported HSA accounts rose to 20 million, a 20 percent increase from the prior year.

As more employees move to HSAs their needs will differ. Some will be looking to spend their savings accounts on current medical bills, while others may choose to invest their balance to save for future healthcare costs in retirement.

Employers should consider Morningstar’s HSAs ranking criteria. Important aspects to review with HSA service providers include low maintenance fees, ease of access for spending funds, and a range of mutual funds for investing to cover all employees’ needs.

Flexible Saving Accounts

If your organization hasn’t moved to the carryover option, it’s probably important to consider. According to the 2016 Flexible Spending Account and Health Savings Account Consumer Research study conducted by C+R Research, 60 percent of non-FSA users agree they would sign-up for the benefit if their employer offered the carryover option. This would remove a barrier to adoption for some employees and generate more interest in this benefit.

The same study also found that 90 percent of FSA users agree that saving money tops their list of reasons for having a FSA and 40 percent acknowledge that they would cut back on their medical expenses if they didn’t have a FSA. Since contributions are pretax, FSAs offer employees a smart way to save on healthcare costs.

Source: The New York Times. The Best Health Savings Accounts for Spending or Investing. July 7, 2017.