Increase Employee Savings and Satisfaction with HSAs
Health Savings Accounts (HSAs) allow employees to set aside pre-tax dollars into an account to pay for eligible, out-of-pocket medical expenses. Whether it's portability, convenience, or a triple tax-free advantage, HSAs provide various short-term and long-term perks for participants.
As an employer, it’s essential to identify employee needs and determine how an HSA might work as a benefit solution. It’s just as important to find effective ways to boost employee participation and utilization. Here’s some insight into current HSA trends—and how you and your employees can maximize the value you receive from HSAs.
1. An emphasis on employee wellness
Prioritizing employee benefits contributes directly to the overall wellness of employees and your organization. With events like the pandemic and the Great Resignation shifting and redefining work culture, employers must focus on perks like healthcare for recruitment and retention. With steady, pre-tax HSA contributions and other matching strategies, employers can set themselves apart from other companies—while demonstrating to employees that they genuinely value their long-term wellness.
2. Consistent employer contributions
Although employers aren’t required to contribute to their employees’ HSAs, doing so can be mutually beneficial and improve employee financial security. Employers contribute to HSAs through a Section 125 plan. A Section 125 plan, or a “cafeteria plan,” allows employees to choose from a variety of benefits, one of which is an HSA. Employees can set aside a portion of their income to pay for their deductible and other qualified medical expenses. The average employer contribution for 2022 was $664 (for those making contributions). 30% of all HSA dollars contributed to an account came from an employer.
For 2025, employers can contribute up to $4,300 for employees with individual high-deductible coverage and $8,550 for family. In 2026, the limits increase to $4,440 and $8,750 respectively.
Contributions such as this make employee benefits packages more appealing. It helps ease the financial burden of out-of-pocket medical expenses for employees. Boosting employee morale and maintaining higher retention over time.
3. Wise spending and investing
A 2024 Devenir HSA survey reported a 5% growth in HSA assets and a 38% increase in HSA investment assets year-over-year. Employees are steadily investing in HSAs, not just to cover current medical costs, but to invest and grow their savings tax-free for their financial futures. While some accounts require employees to hit a minimum balance, HSAs generally allow them to invest their savings in mutual funds, stocks, and bonds. This money gradually increases in their HSA, contributing to long-term growth and financial success in retirement.
Increase your HSA participation with First American Bank Health Account Services
Navigating an HSA strategy can be daunting. However, it’s crucial for employers to learn more about the various options for benefits package designs to help deliver a tax-advantaged savings opportunity and higher employee retention rates.
At First American Bank Health Account Services, we provide insights into financial opportunities and deliver positive user experiences. We offer below-market rates and provide pre-enrollment, open enrollment, and ongoing education to help employers learn more about the benefits of HSAs. Our list of available resources can also equip employers with the knowledge to succeed consisting of brochures, interactive tools, and newsletters.
