Employer Contributions to HSAs Improve the Employee Healthcare Experience
Published on July 27th, 2023
Employers who offer to contribute to their employees’ health savings account (HSA) see a host of positive engagement – from increased HSA adoption rates to greater overall contribution amounts. In addition, when employers offer HSA-eligible high-deductible health plans (HDHPs), they save on FICA taxes. Learn how much more employees contribute to their HSAs with employer seeding.
Employees are more likely to adopt and engage with employer-seeded health savings accounts (HSAs)
Seeding sets employees up for success
Simply by offering to contribute to employee HSAs, employers see an increase in account adoption.1
Average HSA Adoption Rate:
- Without employer contributions: 22%
- With employer contributions: 33%
Employer contributions also influence how much employees contribute to their accounts
Without employer seeding, employee HSAs average $2,291 in total annual contributions.2
Employer seeding increases that amount by an average of 14 percent.
With employer contributions, the average HSA balance goes up to $2,612.
Employers that make contributions:
- Encourage greater adoption of the HSA-qualified health plan
- Deliver better value for their employees’ healthcare dollars
- Have satisfied and engaged employees
With no money in their HSA, many employees may:
- Face out-of-pocket risk that their income can’t support
- Avoid care because they can’t afford the cost
- Miss out on significant long-term savings potential
A win-win solution:
- Employers that offer an HSA-qualified high-deductible health plan (HDHP) can save on both taxes and healthcare spending
- Money that would have gone toward premiums for a traditional health plan can be reallocated as contributions to employees’ HSAs
For more strategies to improve HSA adoption during open enrollment, contact your Alegeus representative.
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1 Source: Alegeus platform data
2 Source: EBRI HSA Database, published January 26, 2023