Recent data from the KFF Health Tracking Poll shows that healthcare costs continue to rank among the top concerns for Americans, closely tied to broader economic pressure. As seen in the poll results, large majorities of voters say the cost of healthcare and prescription drugs is an important factor in how they think about the economy and their personal finances.¹

Employers are seeing the same thing in their own populations. Employees are feeling the strain, which is affecting how they engage with care and benefits.

For employers, the focus is shifting toward helping employees better manage what they’re spending on healthcare. One of the most effective ways to do that is through tax-advantaged accounts.

Premiums are only part of the story. For many employees, the more immediate challenge comes from:

• High deductibles
• Out-of-pocket costs that are hard to predict
• Ongoing prescription expenses
• Competing financial priorities, including dependent care

Benefit strategies often focus on plan design, but employees also need support in how they fund and manage these costs throughout the year.

Health savings accounts (HSAs) continue to be one of the most effective tools available to address healthcare affordability. They allow employees to contribute pre-tax, grow funds tax-free, and withdraw for qualified expenses without taxes. In a high-cost environment, those advantages can make a difference in what employees ultimately spend.

Further, employees can use HSA funds for current expenses or save for future healthcare needs. That flexibility is especially valuable as people try to balance immediate costs with longer-term planning.

Employers can influence outcomes by:

• Making contributions to employee HSAs
• Providing clear, ongoing education
• Positioning HSAs as part of a broader financial strategy

When employees understand how to use HSAs effectively, they are better equipped to manage both routine and unexpected expenses.

Not every employee is eligible for an HSA, and even among those who are, other accounts may still provide value depending on the types of accounts available and how they can be paired with an HSA.

Healthcare FSAs help employees set aside pre-tax dollars for expected medical expenses. They can be especially helpful for individuals with consistent or predictable care needs.

For employees enrolled in HSA-qualified health plans, a limited-purpose FSA can be used alongside an HSA for eligible dental and vision expenses. This allows employees to preserve their HSA funds for broader or longer-term healthcare costs.

Dependent care is another significant expense for many households. Dependent care FSAs (DCFSAs) allow employees to pay for childcare or elder care with pre-tax dollars, which can ease overall financial pressure and make it easier to manage healthcare costs as well.

Offering these accounts is only part of the equation. The impact depends on how well employees understand and use them. Employers can support engagement by focusing on:

• Clear, practical education — Employees benefit from straightforward guidance on contributions, eligible expenses, and how different accounts work together.
• Simple, accessible tools — Digital experiences that make it easy to check balances, submit claims, and track spending can improve engagement.
• Framing benefits in a broader financial context — When these accounts are positioned as part of overall financial wellbeing, employees are more likely to see their value and use them consistently.
• Moving from awareness to action — With healthcare affordability continuing to be a key concern for employees and employers alike, encouraging active use of available benefits is increasingly important.

The recent KFF polling also shows that while voters are focused on healthcare costs, many are not confident that broader systems will meaningfully address the cost of living,¹ underscoring how persistent and personal these cost pressures have become.

While larger policy questions continue to evolve, employers have an opportunity to make a measurable difference today. A thoughtful approach to HSAs, supported by limited-purpose FSAs and DCFSAs, can help employees manage costs more effectively and feel more confident in their financial decisions.

Source:

¹KFF Health Tracking Poll