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How to Encourage Your Employees to Open and Fund HSAs

Focus on education and motivation

 
HSA Employer Customer Service1-866-988-2006
Simply offering HSAs as an option to your employees is not enough. Even when employees are eligible for HSAs, they often don’t enroll in them.
Chart showing that 40% of people eligible have not opened an HSAs
 
As the chart above shows, nearly 40% of people who are eligible for an HSA have not opened one. You can get more of your employees to choose HSAs if you use a comprehensive communications program to show them the advantages of this kind of account1, 2.

Education

Think of your HSA-eligible plan strategy as a PR event or product launch; you will want to introduce the benefits of HSAs with a bang.
How an HSA can help you save
 
Share the following with your employees:
  • Contributions to HSAs can help you save up to 25% or more the amount contributed on your income taxes3 — and can be spent on a broad range of qualified medical expenses. In the above example, using your HSA to pay for $2,000 in qualified medical expenses can help you save $500 in taxes1. The more you contribute to your HSA each year, the more you can save on income taxes.
  • HSAs complement your retirement planning — they are like IRAs for healthcare.
  • HSA-compatible healthcare plans often have lower premiums than traditional PPO or HMO plans.
  • You own your HSA and can carry it over from year to year and into retirement — even if you leave the company or change health insurance.
  • If you open and fund your HSA immediately, you can start using it to pay for healthcare expenses.
  • Remember that it’s your money; you can make sure you spend it wisely by shopping around for the best prices on prescriptions, researching conditions and asking questions, and negotiating discounts with providers.
  • Although your deductible is higher with HSA-compatible healthcare plans, remember that 50% of health plan members spend less than $8,749 a year on healthcare expenses. Most employees won’t have annual expenses that even approach the deductible.
  • Preventive coverage appointments — including annual physicals, mammograms, and OB-GYN visits — are typically 100% covered in an HSA-compatible plan.

Motivation

Contributing to your employees’ HSAs is the most effective way to increase HSA adoption. Even if you can only contribute a small amount, it’s generally enough to motivate employees to open and fund their HSAs. Your contribution, as well as employee contributions made through payroll deductions, can help significantly reduce the FICA and payroll taxes you pay.
Here are some best practices we recommend to encourage your employees to open and fund HSAs:
  • Be as generous as possible with your employer contribution. You can always reduce your contributions in the second or third year of the program, once employees have built up their account balances.
  • Allow before-tax payroll deductions for HSA contributions to simplify taxes and automate contributions.
  • Pay employees’ monthly service fees to encourage them to open accounts.
  • Make a contribution to each employee’s account at the beginning of the year to ensure employees have funds to cover expenses they incur early in the year.
  • Match your employees’ contributions to their HSAs in the same way you match their contributions to their 401(k) accounts.
  • Offer HSA contributions as an incentive for completing wellness program activities such as health risk assessments, smoking cessation, and biometric screenings.

We have resources to help

These videos can help you motivate your employees to open HSAs
See all our HSA tools and resources.

Contact us

If you have any questions, please contact the Employer Customer Service team at 1-866-988-2006, Monday through Friday, from 7:00 a.m. to 8:00 p.m. Central Time or contact your relationship manager.
 
1 Source: Employee Benefit Research Institute’s 2011 EBRI/MGA Consumer Engagement in Health Care Survey.
2
This information is intended to provide informational resources to employers. Please consult with your legal counsel about program design and how to prevent ERISA application to your HSA program. In this guide, Wells Fargo is providing examples that have worked for other customers. You will need to assess if they work in your situation. Wells Fargo does not give legal or tax advice. Wells Fargo Health Benefit Services, a division of Wells Fargo Bank, N.A., does not offer health insurance plans or wellness programs.
3 Savings may vary. HSA contributions up to annual contribution limits are not subject to federal income tax. Please consult a tax advisor for more information.
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