How to Make Changes That Make a Difference for Your HSA Program

The first day of the virtual PLANSPONSOR 2021 HSA Conference detailed how plan sponsors can improve plan design elements and engagement to advance their benefits strategy and deliver positive outcomes for retirement readiness.

Kevin Robertson, chief revenue officer of HSA Bank, a division of Webster Bank, N.A., said during a session sponsored by HSA Bank that there are several features employers can implement to make a difference in their health savings account (HSA) programs, such as requiring active enrollment, facilitating education with employees and using various tools to increase engagement.

“Activation and engagement levers are really attached to these areas,” he said.

Before engaging participants, Robertson noted that it’s important to select the appropriate plan for the employee base. He said most employees choose the wrong plan. According to data by HSA Bank, more than half of all employees choose an incorrect plan and as a result, overpay by $1,300.

“Overall understanding of simple concepts in insurance is completely lost on people,” Robertson added. While employees may understand the basics, because HSA plans and other benefits are looked at so infrequently, they take time to evaluate. Additionally, he said, because it is simpler to stick with a plan once it’s selected, some participants choose not to change, even if it would save them money.

To combat these challenges, Robertson recommended plan sponsors start out by implementing aggressive plan pricing. He said this includes aligning plan pricing to achieve desirable outcomes, considering negative elections on contributions and using matching contributions into the HSA.

Similarly to 401(k)s and other defined contribution (DC) plans, adding a matching contribution can increase overall participation. According to a Willis Towers Watson study, 59% of employees said they would contribute more to their HSA each year if their employer offered a match.

Applying personalized analysis, support and recommendations to an HSA can also create an impact on participation. Robertson said that to increase participation, plan sponsors should encourage people to use preventative care to avoid future health costs, recognize challenges within their plan’s population and consider subsidizing lower paid employees.  

Data from HSA Bank found that when sponsors use these tactics, plan migration increases by three times. Consumer directed health plans (CDHPs) also increased by two and a half times under these approaches, with an overall satisfaction rate of 95%.

Additionally, using videos, online calculators and webinars during open enrollment season can have an effect on participation levels. Nineteen percent of participants who made a health plan decision during open enrollment in 2020 watched videos on the subject, while 16% used online calculators and 14% used webinars, according to HSA Bank research.