By Lauren Bikoff, MLS
Employers rely on how-to guides and group presentations, mostly at open enrollment time, to bring employees up to speed.
More than half of employers educate employees on allocating assets between their 401(k) plan and a health savings account (HSA), suggesting a growing convergence of health and retirement savings. However, employee education remains the dominant concern of HSA plan sponsors (indicated by 60 percent of respondents), according to the Plan Sponsor Council of America’s (PSCA) survey on HSA design and use.
The survey found that the most common resources used to educate employees about HSAs were "how-to" guides (56.6 percent) and group presentations (59.9 percent). HSA education takes place primarily at open enrollment for 76.4 percent of organizations, though one-in-five plan sponsors say they offer HSA education multiple times throughout the year.
"The growth in HSA usage and assets has been explosive, yet this is still a relatively new vehicle that is widely misunderstood," said Jack Towarnicky, PSCA executive director. "These results indicate that plan sponsors have an opportunity to help employees understand how HSAs can be part of a holistic retirement savings plan.
The survey also found the following:
- Slightly less than 40 percent of organizations have offered an HSA to employees for two to five years, while 34.4 percent have offered one for six to 10 years.
- A quarter of organizations encourage or offer additional education to employees who do not contribute to the HSA or only contribute a nominal amount.
- The average participant contribution in 2018 was $2,595 and the average account balance at the end of 2018 was $5,239.
- The majority of organizations (85.6 percent) offer investment options for HSA contributions, though three-quarters require a minimum balance of at least $1,000 to invest assets beyond money market or cash.
- Fewer than 10 percent of organizations use or suggest a default savings rate to employees for their HSA.
MainStory: TopStory AccessNews LargeEmployerNews SmallBusinessNews
Interested in submitting an article?
Submit your information to us today!Learn More
Health Reform WK-EDGE: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on health reform legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.