Why HSAs Should be Included in Your Benefits Package – National Association of Plan Advisors

HSA%20piggy%20bankIn addition to helping employees save for the future, health savings accounts are a must-have benefit that can help employers not only with reducing health costs, but also with recruitment and retention, according to a recent Fiduciary Fitness Podcast

Host Colin Clark, Senior Vice President with the Washington Financial Group, a division of HUB International, along with guest Tina Tucker, Vice President of Employee Benefits at HUB, discuss how HSAs are growing in popularity among employees.

From a recruiting standpoint, Clark and Tucker discuss how it is important for employers to have an HSA in place as part of their benefits package, partially due to the portability aspect. “A lot of employees are coming from HSA programs, and they want to park that money with their new employer, so it really is in an employer’s best interest to have that as an offering,” Tucker emphasizes. 

For advisors, HSAs are a true crossover where teams can work together to help clients maximize their total rewards package. “For instance, when we have mutual clients at HUB where you’re working with them on your side and I’m working with my side, I might meet with an employee and I need to know that they have an HSA because that’s going to be an important part of their financial planning and their retirement planning aspect,” observes Clark. 

“And you can help them when they talk about having money that they can invest, because a lot of that will be tied into what the carrier allows and who they work with, but they could certainly use your advice if they are going to start putting their HSA money into funds,” Tucker further emphasizes.  

Regarding positioning HSAs as a medical retirement account, Clark and Tucker note that once a person has enough money in their HSA, they can then invest it, just like their 401(k) plan. And once an individual gets a nest egg built up, when they turn age 65, they can then use that money to pay for their Medicare premiums in addition to other eligible health expenditures. 

“I would say that if an employer is not offering an HSA plan, they need to at least offer one of their plans that way because it’s allowing people to save for their future. Now they can start investing their HSA money. If they reach over a certain threshold with the carriers, they can take that HSA money and put it in the market, so it’s another savings vehicle,” explains Tucker, who has been in the employee benefit business for more than 35 years and has seen a convergence with health and retirement over the past few years. 

In addition to the savings aspect, HSAs, as part of their triple tax benefit, provide a pre-tax situation where individuals can lower their taxable income, notes Tucker. For 2022, employees who are single can put up to $3,650 in an HSA and up to $7,300 for a family. Moreover, those age 55 and older can make an additional $1,000 catch-up contribution, she explains.  

According to Clark, the big takeaway is, “if I don’t already have an HSA, I need to figure out how we can implement that into our benefits package.”