Weak HSAs Can Threaten Workers' Well-Being
High-deductible health care plans with health savings accounts (HSAs) continue to gain steam, but without careful attention, poor savings habits can undermine an employer's best intentions, experts say.
In a recent report, Bank of America announced a record 34 percent jump in HSAs in 2011, adding more than 50,000 new accounts, according to a report in Employee Benefit News.
"The use of HSAs is rapidly increasing, based in no small part on the rising cost of health care to employers and employees alike," Kevin Crain, director of Bank of America Merrill Lynch's institutional retirement and benefit services division, said in EBN. "We see more and more companies . . . adding consumer-driven health plans to their broader benefit offerings."
In California, high costs prompted family-owned Luminex, a technology firm, to turn to a high-deductible plan with an HSA. In an online report by the Riverside Press-Enterprise, Luminex Chairman Brian Hawley noted that the $1,000-per-year HSA contribution that the company makes for each employee is a better alternative to the proposed premium increase from a traditional plan.
"Like everybody else, we had to figure out how to provide good benefit packages to our employees without going broke," Hawley told the Press-Enterprise.
Underfunded or neglected HSAs, however, can cause considerable harm to employees, and employers should take care to educate their workers about the importance of these accounts, according to Dave Keller of BenefitsPro.
"Much like an increase in monthly mortgage costs from an adjustable rate mortgage, an unfunded large [medical] claim can create a financial hole nearly impossible to escape," Keller wrote in a recent online post.
Keller offers a few suggestions that can help boost HSA savings and make the challenges of high deductibles a bit more manageable for workers:
- Educate your workforce on the difference between high-deductible plans and traditional plans
- Find an HSA with a low or no initial deposit requirement
- Find an HSA that allows online deposits from checking and savings accounts
- Supplement your health plan with accident or critical illness coverage