In a recent ALM Benefits Pro article, Lindsay Barnard and Duke Janssen, two Alegeus executives, discussed the disconnect between what employers and employees find most important regarding health savings accounts (HSAs) and lifestyle spending accounts (LSAs). Alegeus is a leading provider of SaaS-based benefit funding and payment solutions.
Health Savings Accounts
Barnard, who leads product management for HSAs at Alegeus, says employee education is the most challenging issue for employers. Employees often misunderstand their options, mistake their HSAs for FSAs, or fail to open HSAs, even after enrolling in an HSA-eligible plan. Likewise, employees often fail to realize what medical, dental, and vision expenses are eligible to be covered by tax-free HSA funds, which may cause them to delay or forego critical health care due to high expenses. These expenses include co-pays, annual exams, prescriptions, lab fees, over-the-counter medicines, hearing aids, orthotic inserts, and feminine hygiene products. The best HSA plans will have tools that help employees search and find care, compare prices, and access planning tools.
According to Barnard, incentives such as employer seeding, wherein employers deposit a sum of money in employees’ accounts at the beginning of each year, and employer matching funds, can help draw more employees to the plan. In addition, incentive deposits and rewards for wellness activities or completing other tasks can help encourage employee participation.
More importantly, Barnard states that employers can use some simple tools to develop higher employee engagement rates in HSAs, including the following:
- Issue written communications with the average employee in mind, using:
- Clear and jargon-free language;
- Short and digestible messages;
- Real-world examples; and
- Diverse types of interactive media;
- Emphasize both the short- and long-term benefits of the program;
- Target all messaging to the key items that employees need to know; and
- Remember that employee engagement is a year-round activity.
Lifestyle Savings Accounts
Janssen, Vice President of Reimbursement Accounts at Alegeus, states that for employers to offer successful LSA plans, they must first determine the company’s goals. For instance, their goal may be to increase employee retention, to meet hiring targets, or to understand better the needs of employees. In any case, employers also need to tailor their plans to the demographic needs of their employees, such as their social needs, company culture, and geographical location. Employers should focus on developing a single LSA program with multiple eligibility benefits and experiences that best meet the needs of individual employees.
Janssen also notes that LSAs, which have been around for about ten years, have changed over time. Changing economic conditions and the pandemic-related shifts have affected the nature and use of LSAs. For example, while companies traditionally used LSAs as a tool in onboarding, some are now using them as a tool in off-boarding, as lay-offs are occurring. Employers are also bundling LSAs with programs like FSAs, HSAs, HRAs, and more.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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