KANSAS CITY, Mo. — Open enrollment for many corporations across the country begins in just a few weeks, a growing option among health coverage plans and health savings accounts.
Federal law established health savings accounts in 2003, but a 2020 survey found only 1/3 of eligible adults have an HSA.
KSHB 41 is taking this topic 360, talking with:
- Small Kansas City business
- Large corporation
- Benefits specialist
- Financial advisor
As employees prepare to choose their health coverage for the next year, some are not looking forward to the array of plans at their fingertips.
“Lots of choices,” Paula Barnoskie said. “I always wonder if I could get better insurance.”
Those with a high deductible plan are likely presented the choice of an HSA.
In 2022, HSAs reached more than $100 billion in assets, but experts say Americans are leaving money on the table.
Employees KSHB 41 spoke with say they are creatures of habit.
“I usually look at the options and see which one is the best for me, the best fit,” Brittany Drayer said. “But it can be time-consuming.”
With fewer than 25 full-time employees, Charlie Hustle is limited in its insurance options.
“We don’t want them to basically worry about having their entire paycheck in a sense go toward insurance,” said Bailey Weeks, Charlie Hustle controller. “We want to make sure they are still taken care of.”
While they don’t have an HSA option, they’ve upped benefits in other areas to stay competitive.
The company does pay 50% of premiums for its employees, offers unlimited PTO and has implemented four-day work weeks.
“We’ve seen a ton more applications come in for new roles within the company,” Weeks said. “I think the energy around the office has been fantastic, people being able to spend time with their families and have that work-life balance.”
Charlie Hustle pushed open enrollment to the spring. Weeks says it gives employees one less thing on their plate as they wrap up a busy season.
“It kind of elevates some of the chaotic feel during the end of the year,” Weeks said.
“I don’t think there is a right way and a wrong way [to use an HSA]. It depends on your financial situation,” said H&R Block Vice President of Total Rewards and HR Systems Lindsey Lanzisero.
She says the biggest advantage comes later in life.
“Where I think it can really add value is if you are slightly lower income where you can start building up a savings pool in that,” she said. “If you do have a major medical issue, it doesn’t become a huge financial hardship for you.”
In the last two years, employee participation in the HSA plan has increased 35%. Lanzisero credits education and increased employer contribution.
But despite the rise, she says employees care more about benefits they can use every day.
“From my perspective, medical in and of itself is never going to be the differentiator for associates or candidates,” Lanzisero said. “Really what we are trying to lean into on differentiated benefits is the ancillary benefits.”
She says recent additions of parental and caregiver leave, a mental health hub and access to care LGBTQ+ employees feel comfortable using are appreciated.
Scott Hallier with Hallier Benefit Advisors helps run the employee benefits brokerage.
“Everybody is still obviously searching for that magic bullet that is going to solve healthcare, which doesn’t really exist,” Hallier said. “But you are seeing more consumerism. And as we all become better consumers of the plan, it can help to start to turn the trend of the costs that have obviously gotten to be pretty extreme.”
Hallier says the best thing employees can do ahead of open enrollment is educate themselves by looking back at how they used their plan last year and what lies ahead.
While insurance varies by individual, there are larger trends corporations may lean on in the future.
“If there’s any kind of a trend that we’ve seen, it’s employers asking to get moved off of a Jan. 1 enrollment date," Hallier said. "Simply because there is often times so many other things going on at year-end. People may tend to kind of rush through their decisions as opposed to giving it the time that frankly it should have.”
Williams Financial Group founder Stacia Williams is focused on retirement savings for her clients.
She says an HSA should be a secondary retirement savings vehicle, recommending maxing out 401k contributions before moving to an HSA.
But the government does put a cap on such accounts. For 2022, it's $3,650 for singles and $7,600 for families.
“Any tax savings we can get these days are appropriate,” Williams said.
Unlike an FSA, flex spending account, HSAs have the potential to be tax-free all the way around.
“People who have HSAs don’t use it to its full potential because they are just using it for immediate medical expenses,” Williams said. “However, the maximized opportunity of the HSA is you allow it to grow tax-free.”
By putting in money tax-free, it allows the account to grow so money can be taken out tax-free if needed for medical purposes, with a few exceptions.
“First of all, it’s important to make sure you are taking the appropriate risk,” she said. “It’s an investment account, so it’s inside the stock market. With the stock market being as volatile as it is right now, you might suffer some growth.”
As part of KSHB 41 News' commitment to providing context and depth in our reporting, we've excited to share our latest project, which we're calling 360. This project takes stories and topics that our communities are talking about and explores different perspectives on the issue. You can be a part of the process by e-mailing your ideas and thoughts to us at firstname.lastname@example.org.