READER POLL: HSA Interest Strong, Involvement Not So Much

Last week, the powerful House Ways & Means Committee took up several bills aimed at expanding consumer-directed health care plans, notably health savings accounts (HSAs). This week we asked NAPA Net readers to share their experience(s) with HSAs.

A majority – nearly two-thirds (63%) of this week’s respondents – noted that at least some of their clients offered HSAs as part of their benefit programs. Another quarter (26%) said that a few of them did, and about 5% said that all of them did.

That said, two-thirds (67%) of this week’s respondents said they were not involved with the education, administration or sale of those HSAs. About one in five were (on all or most of them), and the rest fell into the “some of them” category.

HSA Investments

Regarding participant investments, a third of this week’s reader poll respondents said that participants in most of those plans were permitted to invest in more than just money market funds, and another 21% said that was the case in all the plans they worked with. About one in eight said that was so in only some of the HSAs, and 5% said they weren’t. However, nearly 30% weren’t sure.

We asked if participants were allowed to invest in other funds, did they take advantage of that option, and the responses were… varied:

27% – yes, some of them
23% – yes, but not many of them
4% – yes, most of them

On the other hand, 28% didn’t know or weren’t sure. The rest don’t work with HSAs.

Noting that recent legislation had included an increase in the HSA contribution limits, we asked readers if that would be a good idea. On that issue, there was very little diversity; 85% said it would be a good thing, and another 12% indicated it would “probably” be a good thing. The rest didn’t think it would matter since most aren’t saving to that limit now anyway.

Reader Comments

Readers had some other things to say on the subject of HSAs as well. Here’s a sampling:

“Legislation needs to be addressed allowing employers to auto enroll eligible HSA employees (at a given deferral % into a balanced fund/QDIA). Additionally, an employer should have the ability to segment an auto enrollment/increase program between the HSA & 401(k) plans without fear of liability. Example: auto enroll in 401(k) to match cap. Next, auto enroll in HSA to match cap/employer determined percentage. Next, auto increase in HSA deferral percentage until hit annual max. Next, auto increase in 401(k) deferral to employer determined percentage (10-15%).”

“I would also like to see HSAs applied to people who are in health sharing plans. Liberty Health Share is not insurance but works a lot like insurance and it would be great to have HSAs apply to those plans.”

“Sounds selfish, but how do you get paid? Is it really a potential revenue source or will it eat away at retirement saving and therefore advisor compensation. It’s hard enough trying to get people to understand and save in a 401(k), can’t imagine trying to add an HSA conversation in the mix with most of my clients. And then adding to the confusion with what an FSA is ­– how they differ. Oy!”

“All of our clients offering an HSA are not interested in creating an ERISA investment fiduciary obligation where not needed, so when adding investments, stick with the standard platform investments or less often, mirror the 401(k) to avoid triggering ERISA. This doesn’t leave a great deal of opportunity for advisors.”

“People thought the Roth was a good idea, that HSA is even better. What most people fail to realize is that at age 65 when they can no longer fund an HSA the funds can be used to pay their Part B premiums, Part D premiums and MedAdvantage premiums along with of course all the other qualified expenses. A person would be silly not to fully fund their HSA for retirement years. Prescription medications by far is the biggest detriment to HSA accounts and claims for on-going expensive medications can drain the accounts annually.”

“I floated the service out there this year to help with HSA investments and it got lots of ‘oh that’s a great idea’ but it’s now stuck in the health insurance renewal/benefits review purgatory.”

Thanks to everyone who participated in this week’s NAPA Net Reader Poll!

And Don’t Forget…

p.s. and don’t forget to vote – or to vote again – on the topics for the 2019 NAPA 401(k) Summit. Our unique online voting tool will bring up two different session topics. All you have to do is pick your favorite – or add your own idea for others to vote on. Then you’ll get two more choices – vote or add one of your own. If you don’t like either of the suggestions (though that’s not likely) – there’s even an option for that. Every time you suggest an idea, it’s added to the pool of ideas that others vote on.

You can vote at http://ideas.asppa.org:3001/2019401ksummitagenda.

But beware: This can be addictive.

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