An employer's contributions to its employees' HSAs, known as "seeding," play a key role in encouraging adoption and engagement.
Employers want to see their workers happy, healthy and thriving. In a competitive job market, they can’t afford not to offer a benefits package that supports overall health and well-being. Yet the reality remains — healthcare costs continue to rise, putting a strain on both employers and employees.
A high-deductible health plan (HDHP) paired with a health savings account (HSA) is a great option for driving consumerism and potential savings — provided employees receive enough education and support. Several factors can affect an employee’s decision to adopt this kind of plan.
If an employee isn’t familiar with the concept of an HDHP, they may experience sticker shock when they encounter their first deductible. In 2025, for example, deductibles start at $1,650 for individuals ($3,300 for families) and can go much higher.
Employers can ease employees’ concerns by contributing to their HSAs — a practice known as seeding. Contributions can be made in different ways, such as:
Research shows that employees are more likely to adopt and engage with seeded HSAs. Even a modest employer contribution can help employees feel supported and make choosing an HDHP more feasible.
While HSA seeding may seem costly, it can still be more affordable than offering a PPO plan. Additionally, HSAs provide tax advantages for both employers and employees, as HSA dollars are excluded from payroll tax. This creates a win-win scenario for all parties. In fact, more than 80% of all HSAs receive employer contributions, according to an April 2024 report by the American Bankers Association.
Seeding isn’t the only way to encourage HSA adoption. Employers can also offer to match contributions, either dollar for dollar or on a percentage basis. Or, they can incentivize adoption by recognizing and rewarding milestones, such as when an employee renews their HSA for another year or reaches the investment threshold.
Learn more about the Alegeus WealthCare HSA and how it offers a competitive advantage here.