Most financial wellness programs provide guidance of the “how-to-divvy-up-your-paycheck” variety: how to create a budget that sticks; which apps might help you create a rainy-day fund; how to maybe, just maybe, pay off your student loans before you retire.
If you offer this kind of program and you have a significant portion of employees on a high-deductible health plan (HDHP), I’ve got good news and bad news.
The good news is that you care about your employees. You want them to worry less about money, feel taken care of, and build toward a comfortable financial future. And that’s fantastic.
The bad news is that your program is missing a critically important ingredient. You’d be much better off investing most of your time, energy and resources in a topic some human resources (HR) teams don’t even consider to be part of the financial wellness conversation: serious health savings account (HSA) education.
1) You’re better positioned to be an HSA expert than a general financial wellness expert.
Let’s face it: It’s an uphill battle convincing anyone that their employer is the ultimate authority on credit card debt or creating a household budget. Many employees already lean on other sources of information—family members, the internet or popular gurus such as Dave Ramsey and Suze Orman. Half the challenge of gaining traction with a financial wellness program is convincing your employees that you’re worth listening to. Even harder is getting them look to you in the first place—engagement, amirite?
Employers don’t face this hurdle when it comes to HSA advice. Health savings accounts are still the new kids on the block, so to speak. Awareness and understanding are still low. In fact, according to recent studies, 65% of Americans don’t understand how HSAs work and only 30% could pass a basic HSA literacy test. That’s really…not great.
Fortunately, employers such as you are uniquely positioned to fill this vacuum. You’re the ones providing the benefit, and you’re the ones they might be looking at to explain it. Your HSA vendor may have some support in place, but it’s likely not enough.
It won’t be like this forever. Benefits communication products and the financial wellness community at large will eventually catch up—just like medical insurance carriers eventually created known member-brands. But right now, you have a golden opportunity to be very helpful to a captive audience of employees who really need your help.
2) You can actually track the success of HSA education, unlike other financial wellness programs.
One of the most frustrating things about funding a financial wellness program is that it’s nearly impossible to know if it’s working. As a group, your workforce might be absolutely crushing it because of your fantastic guidance. But to prove that, a statistically relevant chunk of those employees would have to track their financial behavior and turn over their ATM receipts. Good luck with that.
On the other hand, it’s simple to determine whether an HSA education initiative is successful. All the relevant data is at your fingertips: enrollment and contribution rates, balances, investment rates, HSA education tool usage, and tax savings. With this kind of transparency, you can see if you’re meeting your goals and use the data to justify the budget you want next year. And if you’re not meeting your goals, you’ll know that for sure, which allows you to cut bait with confidence and try something else.
3) Contribution decisions are tied to benefits enrollment, unlike other financial wellness decisions.
Generally speaking, if you’re trying to motivate humans to do something difficult, it helps if they have a limited amount of time to do that thing, and if there are consequences for not doing it. One of the challenges of motivating employees to, say, create a better budget or start an emergency savings account is that there aren’t any built-in deadlines or consequences. Acquiring better financial habits is a smart thing to do today, but you can also do it tomorrow. Or the day after. And that’s the problem.
HSAs work differently. Although employees can enroll in their HSA or adjust their contribution any time of the year, the most logical time to do so is when they first get hired or during your annual, deadline-driven enrollment period. The more you’re able to integrate HSA decisions into larger benefits decisions, the more likely you are to get your employees to listen up—and take action.
4) Undiscovered HSA tax savings: the most delicious, low-hanging fruit.
The most important difference between traditional financial wellness initiatives and HSA education initiatives is that, when it comes to the latter, the pain involved in making a behavioral change is so much smaller and the promised benefits so much more concrete.
Think about it: You’re not asking employees to change the way they think about money. Or stop buying the pumpkin spice Frappuccinos they love so much. You’re just suggesting they pay for the health care expenses they’d be incurring anyway out of a special, tax-advantaged bank account, so they can save money on taxes. It’s pulling a bookkeeping lever, once. Yet only a relatively small percentage of employees are taking full advantage.
Last year, a whopping 83% of out-of-pocket health care spending did not go through a tax-advantaged HSA. And 40% of employees who had access to an HSA didn’t use it. Some people think it’s because HSAs are a hassle or that people are lazy. But I think the problem is ineffective communication.
Your employees still haven’t registered that they can save hundreds of dollars in taxes by barely lifting a finger. I say this with confidence because I’ve seen the effects of great HSA communication first-hand. Last year, users of ALEX—the decision support tool created by Jellyvision—contributed 64% more to their HSAs than the national average. They understood the value, and they acted accordingly. It’s not that complicated.
To be clear, I’m not suggesting you stop telling your employees how to budget better, save better or deal with debt better. That kind of guidance is definitely worth sharing. What I am suggesting is that you: a) throw a lot more money at your HSA communication tools, and b) stop talking about HSAs only in the context of HDHPs and start folding HSA education directly into your existing financial wellness program. Because that’s where it belongs.