Research: Employers contributing to HSAs see employee participation growth

HealthEquity Inc., a Draper-based health care payments technology firm, has released research findings on how health savings account (HSA) contribution strategies influence how employees participate in their HSA benefits. The qualitative and quantitative analysis included a sample of nearly 2,000 HealthEquity clients and more than 2 million HSA members. The analysis provides insight for employers who want to create impactful HSA benefit strategies that support their employees’ financial well-being, the company said.

“Benefit leaders want employees to get the most out of their benefits — including HSAs — and fostering utilization is a constant challenge,” said Amanda Riley, head of enterprise client relationships at HealthEquity. “What we find is that a deliberate employer HSA contribution strategy increases participation, and by extension, more health care savings.”

As of June, nearly $137 billion in assets were housed in over 37 million HSAs in the U.S. HealthEquity found that companies who both seed HSA contributions — by providing an initial contribution into employees’ HSA accounts, and match employee contributions —see 15 percent higher participation than companies who don’t contribute. Further, matching and seeding individually each drives 11 percent higher participation in HSA programs.

The research frames HSA contribution strategies through six key areas of impact. The areas include enrollment, employer cost savings, employee benefit equity, contribution support, employee savings retention and investing.

Some of the key findings in these areas concluded that:

• Any employer contribution will increase HSA enrollment, and enrollment is positively correlated with the amount of money employers are willing to contribute.
• An HSA matching strategy yields the highest employee contribution rate, but similar to a 401(k)-matching incentive, puts the decision-making and financial burden on employees.
• HSA seed contribution strategies provide the most positive impact to benefits equity — meaning the upside increases evenly across all pay grades. A seed strategy also helps members’ savings retention and investing — while decreasing their financial burden.

There are also cost savings to consider, the research found. Employees who participate in HSAs save 16 percent on average, and employers save an average 2 percent for each HSA enrollee, according to a separate study from the Kaiser Family Foundation.

The HealthEquity Employer Contribution Study results can be found online HealthEquity’s website.