HSA Bank Offering Provides Reimbursement to Participants for Education Costs

For employers looking to help their participants afford the mounting costs of continuing education, HSA Bank’s new Tuition Reimbursement Account program aims to alleviate the financial stress that often comes with higher learning. 

HSA Bank, a division of Webster Bank NA and a provider of health savings accounts, announced Thursday that it will offer the TRA program as an employer-provided benefit that can help employees pay for their tuition, specialized training and other costs associated with ongoing education. 

“Tuition Reimbursement Accounts are an excellent addition to our comprehensive benefits offerings,” Chad Wilkins, executive vice president of Webster Bank and president of HSA Bank, said in a statement. “It’s a unique time for employees and employers. We’re seeing record-high student loan debt and an ongoing talent and retention challenge for employers. TRAs will help make education more affordable, while helping employers show their dedication to professional development.” 

The employer-funded program allows employers to determine what expenses are eligible for reimbursement and the annual reimbursement limits, according to HSA Bank. These expenses may include tuition, books and other required learning materials, registration fees, lab fees, exam fees and more. Once eligible expenses are approved, employees may be reimbursed on a tax-free basis up to the IRS annual limit of $5,250.  

The announcement comes at a time when President Joe Biden’s plan to cancel up to $20,000 in student loan debt for 40 million eligible borrowers awaits a decision from the Supreme Court. Biden’s plan was challenged by two lawsuits brought by Republican state officials and conservative legal organizations. 

Payments on federal student loans have been on pause since the start of the pandemic in 2020 but are set to resume 60 days after June 30 or 60 days after the Supreme Court’s decision announcement—whichever comes first. Industry experts say once people are required to start paying off their loans again, the demand for employer-provided student loan benefits will increase. 

The SECURE 2.0 Act of 2022 also includes a provision that permits employers to make matching contributions to an employee’s retirement account when the employee makes “qualified student loan payments.” The intention is that people would not have to forgo retirement savings while repaying student debt. 

According to HSA Bank, TRAs provide value for plan sponsors and participants by helping employees advance in their careers by attending school or specialized training programs and by providing multiple options for how to use the funds, all while supporting employers’ recruitment and retention goals. 

TRAs also provide flexibility in that participants can sign up for the program at any time during the year, based on their employer’s plan, rather than having to wait for the next enrollment period. 

Typically, employees must complete the course they are taking with a passing grade before they can request reimbursement. Once expenses are approved by their employer, employees may be reimbursed up to the maximum contribution limit per calendar year.