2024: The Year of the HSA? Empower Your Employees and Save Money

As we head into 2024, the conversation around healthcare continues to evolve, and Health Savings Accounts (HSAs) are emerging as a powerful tool for both employers and employees. Recent statistics paint a clear picture:

• HSAs are booming: The Devenir Research Institute reports that in 2022, a record 30.6 million Americans owned HSAs, with an average balance exceeding $4,642.
• Employers are embracing HSAs: A 2023 survey by the Society for Human Resource Management (SHRM) found that 74% of employers offer HSA-compatible health plans.

This surge in popularity isn’t accidental. HSAs offer a win-win situation:

For Employees:

• Tax-free savings and growth: Contributions to HSAs are tax-deductible, and earnings grow tax-free. Withdrawals for qualified medical expenses are also tax-free.
• Control over spending: Employees have more say in how they manage their healthcare dollars. They can pay for deductibles, copays, prescriptions, and more, directly from their HSAs.
• Portability and long-term savings: HSAs are owned by the individual, not the employer, offering portability and potential for long-term savings through investment options.

For Employers:

• Cost savings: HSAs are typically paired with High-Deductible Health Plans (HDHPs), which typically have lower premiums than traditional plans. This can translate to significant cost reductions for employers.
• Talent attraction and retention: Offering HSAs can be a major perk, attracting and retaining top talent who value control and tax-advantaged savings.
• Reduced administrative burden: HSAs shift some responsibility for healthcare spending to employees, potentially streamlining administrative tasks for employers.

Contribution Strategies and Flexibility for Employers:

• Matching contributions: Incentivize participation by matching employee contributions.
• Fixed or tiered contributions: Offer fixed amounts or adjust contributions based on employee needs or health status.
• Payroll deductions and HRAs: Simplify contributions and offer reimbursements for qualified medical expenses.

Embrace the HSA Advantage in 2024:

With the increasing popularity of HSAs and their clear benefits for both employers and employees, 2024 presents a prime opportunity to explore how HSAs can fit into your organization’s healthcare strategy. By offering HSAs and considering various contribution strategies, you can empower your employees, take control of healthcare costs, and create a more sustainable and rewarding healthcare experience for everyone.

One noteworthy option NARFA offers is the pairing of High Deductible Health Plans (HDHPs) with HSAs. This combination not only provides substantial cost savings for employers through lower premiums but also empowers employees to take charge of their healthcare expenses. HSAs allow individuals to save tax-free, offering both short-term benefits for medical expenses and long-term potential through investment opportunities.

Take the next step:

• Learn more about HSAs: Visit the IRS website and other resources to understand the details and benefits.
• Talk to your benefits provider: Discuss incorporating HSAs into your employee health plan options.
• Educate your employees: Provide clear information about HSAs and their potential advantages.

By embracing the HSA advantage, you can create a healthier and more financially secure future for your employees and your business.