trendspotting | PLANADVISER July/August 2017

Employers Support HSAs

By Rebecca Moore | July/August 2017

The majority (75.3%) of the employers responding to the Plan Sponsor Council of America (PSCA) HSA (Health Savings Account) Snapshot Survey view HSAs as part of their retirement benefits strategy.

Nearly 60% of the respondents believe HSAs should replace flexible spending accounts (FSAs), and nearly three-fourths think HSAs should be open to all employees, not just those enrolled in a high-deductible health plan (HDHP).

Based on the employer responses, about 80% of employees are eligible to participate in an HSA, when offered by the employer. The average HSA balance is $3,161. A little over 40% of respondents indicated that up to 25% of their participants use up their entire HSA balance every year; an additional 35% of plans said that 26% to 50% of their participants similarly deplete their entire balance.

More than 80% of the employers said that they contribute to the HSA, whereas two-thirds provide a set dollar amount based on the HDHP coverage tier. Many plans (40%) front-load contributions at the start of the year, while 30% contribute each payday.

More than half of the respondents reported covering the cost of HSA maintenance fees for active employees.

Only 21% of surveyed employers are concerned about the fiduciary liability of sponsoring an HSA-HDHP.

The Effect of HSA Ownership on Savings

  • Participants with an HSA contribute more than 10% to their 401(k)
  • Participants with HSAs have $119,000 more saved in their 401(k) than those without HSAs

Source: Fidelity Investments