Plan Sponsors Like, Want to Expand HSAs

A new survey finds that plan sponsors are enthusiastic about health savings accounts (HSAs), and the vast majority view HSAs as part of their retirement benefits strategy.

The survey of 255 employers (181 of which currently sponsor an HSA-qualifying high-deductible health plan, or HDHP) by the Plan Sponsor Council of America found that more than three-quarters (75.3%) of employers view the HSA as part of their retirement benefits strategy, and nearly 60% believe HSAs should replace flexible spending accounts (FSAs). Moreover, nearly three-fourths of employers think that HSAs should be open to all employees, not just those enrolled in an HDHP.

About 80% of all employees are eligible to participate in an HSA when one is offered by their employer, and nearly 60% of eligible employees participate in an HSA.

More than 80% of employers contribute to employees’ HSAs; two-thirds provide a set dollar amount based on the HDHP coverage tier. The majority of plans (40%) front-load contributions at the start of the year, while 30% contribute each payday. More than half of employers pay HSA maintenance fees for active employees, and 6% pay them for terminated employees. Only 21% of surveyed employers are concerned about fiduciary liability from sponsoring an HSA-HDHP.

The average HSA account balance was $3,161, the survey found. A little more than 40% of plans indicate that 25% or fewer of their participants use up the entire HSA balance every year, and an additional 35% of plans state that 26-50% of their participants use their entire balance every year.

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