A confident banker talks to two business partners about how offering an HSA can improve their business.

HSAs and commercial bank customers

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Broker advising clients on HSAs

Lauren Hargrave - Headshot

A couple of older Americans at their kitchen table looking over retirement planning documents on a laptop and thinking about how their HSA fits in.

retirement planning with hsa

A woman HR professional gives a presentation about health plan sign up and HSA options

HDHP adoption

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Sustainable best-in-class employee benefits

Diverse group of three women and two men dressed professionally at a conference table in a commercial bank happily discussing HSA partnership options

Financial institutions hsa partnership

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integrity and innovation 

Adam Berry

earn-for-retirement

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Benefits of HSA employer matching

lively

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People first benefits HR thought leadership

using-benefits-wisely

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financial advisors and hsas

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Employee Benefits Pulse Check 2023 Blog Header

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open enrollment resources

Jessica Pfisterer

Lively can simplify your understanding of a Section 125 Plan by reading our articles.

Section 125 Plan Articles

Jessica Pfisterer, VP of People, discusses how to build a best-in-class benefits package that maximizes value for HR leaders and employees.

How to Balance Employee Benefit and HR Administration Needs

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What HR Leaders Should Look for in an HSA Provider 

Open Enrollment

Lively can simplify your understanding of open enrollment. Here is what you need to know about open enrollment, healthcare, benefits, retirement, and of course HSAs.

HSA Account Rules

Lively can simplify your understanding of HSA account rules. Here is what you need to know about HSA account rules, healthcare, benefits, and retirement.

HSA account rules

Lauren Hargrave is a writer from San Francisco who focuses on technology, finance and wellness. She follows comedians like most people follow bands and believes an outdoor sweat session can cure almost any bad mood. She’s also been writing her first novel for so long, her mom doesn’t ask about it anymore.

Lauren Hargrave

Lively can simplify your understanding of HDHP. Here is what you need to know about HDHP, healthcare, benefits, retirement, and of course HSAs.

HDHP

Employee Benefits

Lively can simplify your understanding of employee benefits. Here is what you need to know about employee benefits, healthcare, retirement, and of course HSAs.

Employee benefits

Adam Berry oversees Lively’s Financial Institution Partnerships channel and works with banks across the country to develop and implement HSA product solutions. Over the last 20 years, Adam has gained a significant amount of HSA experience working for national TPAs and creating HSA programs within brick-and-mortar regional banks. HSAs are a personal passion of Adam’s, and he specializes in bringing entities together to discuss transparent, unique, and innovative solutions that result in a better way to do business, increase revenue for Lively’s banking partners, and improve the lives of their mutual customers.

Our second annual report that captures critical insight from HR leaders about the employee benefits that make an impact for retention and cost savings.

The Employee Benefits that Matter Most Right Now According to HR Leaders

What financial institutions should look for in an HSA provider to ensure a productive, profitable relationship and gain and retain customers.

What Financial Institutions Should Look For in an HSA Partnership

Personal Finance

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Learn how your HSA can help you in retirement and other retirement tips in his collection of articles 

Retirement Articles

There are many benefits to matching your employee’s HSA contributions. Learn everything you need to know here.

Benefits of Employer HSA Contribution Matching

Lively can simplify your understanding of retirement planning. Here is what you need to know about retirement planning, healthcare, benefits, and of course HSAs.

Retirement Planning

Lively can simplify your understanding of benefits in these articles.

Benefits Articles

As Vice President, People at Lively, Jessica leads the recruiting, HR, people operations, and employee experience functions. She brings an innovative approach to people teams and company culture based on her experience leading people teams at fast-growing startups. Her expertise in total rewards, engagement, and leadership allows her to partner with senior leaders on strategic people initiatives to drive the business forward. Jessica was the first people operations hire at MuleSoft, where she built and managed the function during international hypergrowth. At Greenhouse, she again started and grew the people operations function, along with the employee experience function, during a period of sustained growth. Jessica is a Senior Certified Professional by the Society for Human Resource Management. She holds a JD from Georgetown University and is an inactive member of the California Bar Association. 

Lively can simplify your understanding of HSAs. Here is what you need to know about HSAs, healthcare, benefits, and retirement.

HSA Articles

The key information financial and investment advisors need to know about Health Savings Accounts (HSAs) and how they help their clients build their retirement savings.

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Health Savings Accounts

Lively can simplify your understanding of benefits. Here is what you need to know about healthcare, benefits, retirement, and of course HSAs.

Benefits articles

Benefits

Lively can simplify your understanding of HSA partners. Here is what you need to know about Lively partners, healthcare, benefits, retirement, and of course HSAs.

Lively partners

HSAs are an impactful, and often overlooked, product to enable banks and credit unions to attract, and retain, high value commercial customers.

How HSAs Help Financial Institutions Gain and Retain Commercial Customers

Open enrollment is here. Discover how benefits brokers should be talking about health savings accounts during open enrollment.

Best Ways Benefits Brokers Can Talk About HSAs During Open Enrollment

Lively can simplify your understanding of HSAs. Here is what you need to know about healthcare, benefits, retirement, and of course HSAs.

Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache. 

Lively

Retirement

Section 125 Plan

Jessica Pfisterer, Lively's VP of People, discusses strategies HR leaders can use to help drive HSA adoption and what those look like in practice.

How to Support Employee HSA Adoption

HDHP (High Deductible Health Plan)

Here, employers can discover how to make a HSA-qualified high deductible health plan strategy a success. Learn more.

How to Make Your HSA-qualified HDHP Strategy a Success

Lively’s expert resources have been written to help benefits brokers, employers, individuals, and employees to easily sign up for the benefits they need and have a successful open enrollment.

Resources for Open Enrollment Success

Financial Institutions

Lively Partners

Why the retirement gap exists and how HSAs are crucial to helping workers set themselves up for retirement, even if they have a 401(k) or IRA.

How Can an HSA Help Bridge the Retirement Gap?

HSA (Health Savings Account)

Health Savings Accounts (HSAs) might have launched 20 years ago, but there is still ample confusion about how they work and the benefits they impart to both employers and employees. Benefits brokers can help clear up this confusion by providing effective communication and resources that say the right thing, in the right way, at the right time. 

In this post, we’ll give benefits brokers the tools to overcome the communication challenges inherent to a health insurance marketplace that is constantly changing. You’ll know how to talk about HSAs (hint: don’t refer to them by their acronym), how to talk to employers and the types of resources that can do a lot of the heavy lifting so that employees understand, enroll in, and adopt their benefits this open enrollment. Let’s get started.

## What are the communication challenges?

When it comes time for employees to choose health insurance, there are a lot of products to choose from, especially supplemental savings and spending accounts, which can be pre- or post-tax, depending on the type of the account. To add to the confusion, some of the products have similar acronyms (e.g. HSA, FSA and HRA), and employees can often mistake one for the other. 

So when benefits brokers are talking about [Health Savings Accounts](https://livelyme.com/guides/hsa-guide/) and other saving and spending accounts with their clients, one key point to make is to differentiate this type of account from others. You can also help ease open enrollment communications challenges by: 

- Highlighting the rules and benefits of the account in simple language
- Speak to the concerns employers have
- Provide resources that can be an ongoing source of truth for employers and employees alike

Providing ongoing resources helps to ensure trust of, and engagement in the benefit account.

## Reframe how you talk about Health Savings Accounts

To effectively communicate the value of an HSA, focus on the long term savings value of the account, the healthcare and tax savings associated with an HSA, and how an HSA can complement other flexible employee benefits.

###  Emphasize the long term savings 

__Instead of saying “it’s a more flexible FSA” or a “super-charged FSA,” describe an HSA like a “401(k) for healthcare.”__ 

When explaining what an HSA is, many benefits and HR professionals can refer to it as a “more flexible FSA” or a “super-charged FSA”. But likening it to an Flexible Spending Account is discounting some attributes of the HSA that make it so valuable to employees and employers alike. Instead of using the FSA as a way to explain what an HSA does, try using the 401(k) as your reference. 

The key difference between an FSA and an HSA is that HSAs are owned by the employee and the balance never expires. In addition, account holders are able to invest their HSA balance and those investments grow tax-free. Therefore, the long-term savings capabilities of the HSA and the ability to use it as a retirement account liken it to the way the 401(k) functions and contributes to the participant’s overall financial health. Referring to the HSA as a healthcare 401(k) is not only a more accurate depiction of how the account functions and the benefits it imparts, but it helps frame the account in users’ minds as a long-term savings vehicle.

### Highlight healthcare savings and zero cost preventative care

__Emphasize that High Deductible Health Plans cover 100% of preventative care, pre-deductible, and highlight key aspects of coverage, such as wellness checkups, vaccines, and prescriptions for chronic conditions. 
__

Another aspect to the HSA that could benefit from a reframing is the [High Deductible Health Plan (HDHP)](https://livelyme.com/guides/hdhp/). Since enrollment in this type of health insurance plan is necessary in order to participate in the HSA, it can present a hurdle for employees because the amount of the deductible can make them nervous. 

When talking about the HDHP combined with the HSA, highlight that a [long list of preventative care](https://www.irs.gov/newsroom/irs-expands-list-of-preventive-care-for-hsa-participants-to-include-certain-care-for-chronic-conditions) is covered at 100% prior to the deductible being met. That means well visits, prescriptions for chronic conditions, vaccines, insulin, and more are covered with no out-of-pocket requirements under an HDHP. So employees can save their contributions for larger, big-ticket health expenses and save money on their monthly premiums at the same time.

### Demonstrate the tax savings

__Show how HSAs reduce employees’ and employers’ tax burden and adds money to employees’ pockets. __

HSAs help both employees and employers save on taxes. When an employer offers an HSA and employees make pre-tax contributions, that lowers employees’ taxable income and the employers’ FICA tax burden. In addition, when employers offer an [employee match](https://livelyme.com/blog/benefits-of-hsa-employer-matching/), they can write off the matching funds as a business expense. To show employers how much they can save when they offer their employees an HSA and employer match, use our [payroll tax savings calculator](https://livelyme.com/payroll-tax-savings/).

For employees, illustrate how they can add money to their pocket by reducing their tax burden when they contribute to an HSA and save on taxes with tax-free distributions now and in the future for qualified medical expenses. Use our [HSA savings calculator](https://livelyme.com/hsa-savings-calculator/) to  highlight just how much participants can save and the compounding effect of contributions made and saved over time, especially if participants invest their HSA balance.

### Showcase how HSAs are part of a modern, flexible benefits package

__Discuss how HSAs are compatible with other types of health and wellness accounts to drive more savings and engagement.__ 

HSAs also complement a host of other benefit accounts like [Lifestyle Spending Accounts (LSAs)](https://livelyme.com/guides/lsa-guide/), [Medical Travel Accounts (MTAs)](https://livelyme.com/guides/mta-guide/), and [Limited Purpose and Dependent Care Flexible Spending Accounts (FSAs)](https://livelyme.com/guides/flexible-spending-account-fsa/) to give employees a contemporary, competitive and flexible benefits package. All of these benefits give employees the purchasing power to spend their benefits money on the expenses that will have the greatest positive impact on their lives. The greater the positive impact, the healthier, more productive and more loyal these employees are likely to be.

## Follow these best practices to communicate the value of HSAs

Now that we’ve talked about the “right thing” you should say, we’re going to address the “right way” and “right time” to say it.

### 1. Avoid use of jargon

Nothing turns an employee's eyes from focused to glazed faster than the use of words they don’t understand. But jargon isn’t just exclusive, it’s ineffective and it often fails to encapsulate exactly what something is or does. So when talking about HSAs, it’s better to use simple language to answer the “what” and the “how” questions about this account.

That means using the full benefit name: Health Savings Account either as much or more than you use the acronym. It also means instead of saying, “triple tax advantage” to refer to HSAs tax-favored status, explain the tax-related benefits in terms of how they function. For example, you could say, “You won’t pay taxes on the money you contribute to your health savings account and use to pay for qualified medical expenses.”

By using simple language you can help employees see HSAs as less complex and more user friendly. They are also more likely to feel comfortable signing on for this type of benefit and confident in their decision to do so.

To help break down complex terminology, share our [Glossary of HSA and Health Insurance Terms](https://lively.foleon.com/resource/health-insurance-hsa-terms-glossary/) with your clients and their employees.

### 2. Know your clients’ motives

Before you can create your sales collateral aimed at employers, you have to know what they’re looking for this year. Their concerns are meeting employees’ benefit needs while still containing costs. Inflation, employee turnover, supply chain disruptions and more are putting pressure on HR teams to provide more with fewer resources. In fact, 45% of employers surveyed by Aflac stated that offering a competitive benefits package was the biggest challenge they faced this year, yet a recent Lively survey of HR leaders found that 84% of organizations have improved benefits in the past 12 months to attract and retain employees. 

In order to truly help employers achieve this goal, benefits brokers must help companies choose cost-effective benefits that will have a large impact on employees’ mental, physical and financial health. Benefits that are popular and benefits for which employees can realize positive effects immediately. HSAs fit this bill. 

- HSAs help companies save money. HDHPs typically have the lowest premiums of the health insurance plans and when paired with HSAs can help companies [save thousands of dollars in FICA taxes](https://livelyme.com/payroll-tax-savings/).
- HSAs help employees improve their financial, physical and mental health. They give employees a tax-free way to save and spend health care dollars and even save for retirement. This can lead to lower financial stress (thus improving their mental health), and better physical health because they both have a way to pay for the medical care they need, and are experiencing less stress so they’re less likely to have stress-related physical symptoms. This helps companies’ bottom lines because healthy employees are productive employees.
- [HSAs (especially HSAs that can be invested) are popular benefits](https://lively.foleon.com/resource/hsa-modern-benefits-package-sharing/) and offering them can help improve retention and recruitment efforts.  

### 3. Help employers understand the benefits of mitigating employee stress

To focus employers’ attention on how HSAs help to mitigate employee stress and the benefits of doing so, using data can be hugely effective. Here are some statistics around the state of employee stress levels, how they are affecting employees’ health and productivity, and of course, the companies’ bottom lines.

- [47%](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) of HR leaders say that employee stress around financial standing has increased.
- [92%](https://www.apa.org/pubs/reports/work-in-america/2023-workplace-health-well-being) of surveyed workers said it’s important to work for a company that values their emotional and psychological well being.
- [53%](https://www.benefitnews.com/advisers/opinion/how-employee-financial-stress-increases-healthcare-costs) of employees say their financial stress interferes with their work.
- [83%](https://www.benefitnews.com/advisers/opinion/how-employee-financial-stress-increases-healthcare-costs) say financial benefits are critical to their financial security.
- [80%](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) of HR leaders say that competitive financial benefits are more important than last year.

In addition, financial stress can lead to deteriorating physical health and decreased productivity. Unfortunately, people with financial stress tend to avoid getting healthcare which leads to worse health outcomes and higher healthcare costs and lower productivity, absenteeism and turnover. In fact, a workforce with more financially stressed employees will see more sick days. This unscheduled absenteeism costs these companies, on average, $3,600/year per employee for hourly workers and $2,650/year per employee for salaried workers. 

Conversely, employees that leverage financial benefits enjoyed a 4.5% reduction in healthcare costs. Companies that launched these initiatives experienced an ROI of between 100-300% on these programs.  

### 4. Provide resources and work with a provider that makes HSA education easy

One way to ensure that employers and employees alike remain happy with (and engage with) their benefits, is to provide resources during open enrollment that clearly explain the positive attributes of their benefits, as well as resources they can access at any time. 

Resources to provide during open enrollment can be brochures, a landing page for each benefit offering complete with an FAQ, and a digital tool that can help smooth out the open enrollment process. Other employee education services include town halls, AMAs and shorter communications via chat, text and email.

To provide ongoing resources, look for an HSA provider that offers easy-to-use tools and dashboards that enable employees to easily learn about and manage their HSA. This includes showing balances, total annual contributions made and how close they are to the annual contribution limit, and making it easy to change contribution amounts. Providers should also include resources like ongoing account holder education that explains how to use their accounts to fully realize their benefit.

### 5. Start small and set your clients and their employees up for success

For employees, the thought of building a large savings can be overwhelming to people, especially if they are starting with small contribution amounts. They might even feel as though “they’ll never get there” in terms of saving enough to pay for the  deductible. Here are some strategies that your clients can use to help get them comfortable with opening an account.

- Offer a [contribution calculator](https://livelyme.com/hsa-savings-calculator/) that shows the effects of compounding interest and investment of their contributions over time. This can give them a tangible picture of how small amounts saved add up over time.
- Encourage [employers to contribute money to employees’ accounts](https://livelyme.com/blog/benefits-of-hsa-employer-matching/). These contributions can be in the form of matching or a lump sum, but either way, employer-seeded accounts tend to perform better with employer contributions than those without. And not only do more employees adopt the HSA, they’re also more likely to contribute more money to their account if their employer also contributes.

## Ways Lively can help

Lively offers a [best-in-class HSA](https://livelyme.com/brokers/) that helps employers offer a popular benefits package that can improve their bottom line. Our UI is simple, clean and easy to use, HSA account holders can choose from different investing options, or they can choose to keep their contributions in savings. We offer a debit card, industry-leading customer service and account holder support all year long and we take care of all employee onboarding and communication. Our goal is to make HSA administration seamless with employers’ current systems and easy for everyone involved. We also offer transparent pricing to make it easier for companies to stay within their budgets and for employees to keep more of their money.

## Get started today!

Lively is your partner during open enrollment and beyond. If you’re looking to uplevel the benefits options you’re presenting to your clients, [reach out today](https://livelyme.com/contact-sales/). We’ll help you provide a greater service to your current clients and win new clients so everyone succeeds.  


How Benefits Brokers Can Effectively Discuss HSAs During Open Enrollment

There are many reasons to offer your employees benefits. The first being, it’s legally required in many cases. But beyond complying with state and federal employment law, offering employees benefits actually benefits employers if it’s done the right way. 

If employers offer employees benefits that are impactful and cost-effective, that solve real needs employees have, they can enjoy returns on that investment that include: a [healthier](https://www.pacificprime.com/blog/employee-medical-insurance-why.html) (and thus more productive) workforce, [increased employee loyalty](https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/benefits_loyalty.aspx), [higher talent retention and improved recruitment efforts](https://www.uschamber.com/health-care/new-survey-shows-health-benefits-rank-most-important-to-employees). And if they offer a particularly popular benefit: the [Health Savings Account (HSA)](https://livelyme.com/guides/hsa-guide/), they can also enjoy the cost containment regarding their health insurance spend.

But it’s not enough to just offer popular benefits. Employers need employees to adopt and engage with these benefits in order to experience the positive changes we noted above. One way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

## What is employer matching?

Employer matching means that an employer develops a formula that it will use to determine how much it will contribute to employees’ accounts based on said employees’ contributions. Employers could choose to match employees’ HSA contributions dollar-for-dollar, dollar-for-dollar up to a certain amount, or a percentage of employee’s contributions up to a certain amount. 

All Health Savings Accounts are subject to [contribution limits](https://livelyme.com/blog/hsa-contribution-limits/), which are set each year by the IRS for individual and family accounts, so total contributions (employee plus employer) cannot exceed that annual limit. 

## How does it work? 

If you’ve decided you want to match employees’ contributions to their HSAs, you must first determine how you want to do that (i.e. as part of a Section 125 plan or cafeteria plan or outside of a cafeteria plan). Then, determine your formula. 

The pros of using a cafeteria plan to contribute include:
- Employees can make their contributions via a pretax payroll deduction. This will reduce your FICA tax burden.
- Contributions are not subject to comparability rules. These rules state that all employer contributions must be either the same dollar amount or the same percentage of the High Deductible Health Plan (HDHP) deductible. If employers fail this comparability test, then they could be subject to a [35% excise tax](http://www.vision-hr.com/news/can-match-employees-pretax-hsa-contributions/). They are subject to [nondiscrimination rules](https://www.coredocuments.com/employee-classification-groups-nondiscrimination-rules/), however.

If you are using a cafeteria plan to contribute to employees’ HSAs you must:
- Set up a cafeteria plan if you don’t already have one in place. Your cafeteria plan must allow employees to make pre tax salary reduction contributions to their HSA.
- Your matching formula must be crafted to comply with [IRS nondiscrimination rules](https://www.coredocuments.com/employee-classification-groups-nondiscrimination-rules/).

Once you’ve decided how you’re going to contribute to employees’ HSAs, determine either: the flat amount you’ll contribute (if you’re contributing outside of a Section 125 plan), or the matching formula that you feel will adequately benefit employees and incentivize them to contribute to their HSA, and fits within your budget (if you’re using a Section 125 plan). You can also choose to contribute a flat amount to all employees’ accounts via a cafeteria plan.

Then you must use this same formula for all employees who are eligible to contribute to their HSA. Just make sure your match doesn’t exceed [IRS contribution limits](https://livelyme.com/blog/hsa-contribution-limits/) for the applicable year. Then, at the start of your plan year, as each employee contributes, you match their contributions accordingly. For guidance in calculating an employee match, use our [savings calculator](https://livelyme.com/payroll-tax-savings/).

## How does it benefit employees?

An employer match of employee HSA contributions supports employees financially, physically and emotionally. An employer match supports employees financially because the employer is contributing “free money” to an employee’s account to help them pay for out-of-pocket qualified medical expenses. And since any unused funds roll over from year-to-year, the employer is also helping employees save for a medical rainy day and even retirement. Employer contributions are tax-free to employees.

Employer matching benefits employees physically because their contributions help ensure employees have the money to pay for medical treatment when they need it. This can help [ensure employees get timely treatment](https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity.pdf) (which keeps them healthier) and can afford the prescriptions and other health supports they need.

Employer matching benefits employees emotionally because it can help reduce the [financial stress](https://graystone.morganstanley.com/the-parks-group/articles/graystone/thought-leadership/financially-stressed-employees) many feel when facing rising medical costs, chronic health issues and more. 

## How does it benefit my business?

There are many ways contributing to employees’ HSAs can benefit your business. In this section we’ll explore how making even small contributions to their accounts can reduce your business’s overall tax liability, help contain your health insurance spend, boost employee productivity, increase their loyalty, and help improve recruitment and retention efforts.

### Tax advantages

There are two ways employer matching of employees’ HSA contributions can reduce their overall tax burden. First, every dollar employers contribute to employees’ HSAs can be written off as a business expense. Second, and this the big one, every dollar employees contribute to their HSA reduces the employer’s FICA tax liability. By matching employee’s contributions, employers can incentivize employees to contribute more than they normally would, thus reducing their tax burden further.

To calculate how much you can save in FICA taxes when you contribute to your employees’ HSAs, use Lively’s [Payroll Tax Savings calculator](https://livelyme.com/payroll-tax-savings/).

### Contain your health insurance spend

Employees can only contribute to an HSA if they are [actively enrolled in an HDHP](https://livelyme.com/guides/hdhp/) and it’s their only health coverage. And since HDHPs are typically the most affordable of the health insurance plans from a premiums perspective, the more employees that are enrolled in the company’s HDHP, the lower its premium obligation is. But the high deductible can make employees nervous to take this health insurance option. 

However, by offering employer contributions to employees’ HSA accounts alongside the HDHP plan, employers can incentivize employees to take this more affordable health insurance option because they have financial support toward that higher deductible.

### Boost employees’ productivity

By financially supporting employees’ out-of-pocket costs, and by incentivizing employees to save more of their own money in their HSAs, employers can help to ensure employees have the money to pay for medical care when they need it. Employees that have the money to pay for care when they need it are more likely to get timely care, which means they are likely physically healthier and experience lower financial stress than employees that don’t have the means to pay for the care they need. Healthier employees (both from a physical and mental standpoint) are more productive employees.

### Improve employee loyalty and retention

According to experts, employees feel [more loyalty](https://hiring.monster.com/resources/workforce-management/employee-performance/why-loyalty-matters/#:~:text=The%20Truth%20About%20Employee%20Loyalty&text=According%20to%20experts%20in%20the,company%20is%20loyal%20to%20them.) toward their employers if they feel like their employers value and are loyal to them. Employees want to feel cared about. They want to stay where they are supported. They want to stay where it makes financial sense to do so. 

By matching employee HSA contributions, employers show they value their employees, they financially support employees’ physical and mental health, and they provide a financial benefit that can be more affordable than a simple salary increase but still contributes to employees’ household bottom lines.

### Attract top talent

HSAs are among the fastest growing benefits in [popularity](https://www.devenir.com/wp-content/uploads/2022-Year-End-Devenir-HSA-Research-Report-Executive-Summary.pdf). With all the attributes this type of account has, from saving for future medical needs (and even retirement) to the ability to invest your contributions, HSAs are a highly desirable benefit for incoming talent. In fact, in a survey of HR, Lively found that [79% say that HSAs are effective in attracting and retaining top talent](https://lively.foleon.com/resource/hsa-modern-benefits-package-sharing/). By offering employer matching, companies can show that they not only support the employees by giving them the benefits they want, but they will financially support them as well.

## Get started today!

If you’re looking to uplevel your benefits offerings, including offering a best-in-class HSA that makes employer matching and administration easy, [reach out today](https://livelyme.com/contact-sales/). Lively is your partner in providing your employees with the most supportive package that also fits within your budget. We make plan administration easy and effective, and we make HSA management streamlined and intuitive for account holders. We’re here to support employers and employees alike in building a better company and financial future.

Ways Health Savings Account Matching Benefits Employers

In an environment of economic volatility and rapidly shifting employee expectations, the pressure is on HR leaders, and the benefits brokers that serve them, to offer employee benefits that make an impact when it comes to employee retention, recruitment, and cost savings. Lively’s second annual [*Employee Benefits Pulse Check*](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) captures and shares the decisions that HR leaders are making around benefits right now. In partnership with CITE research, we anonymously surveyed 250 HR leaders across the United States and multiple industries to capture key data and understand current trends around what employee benefits.

[![EBPC23 BlogInline 1098x336 1](//images.ctfassets.net/6j8y907dne6i/6e0pSQEcY6Vw9thR5pK4lO/a8e9ffe0e9e7b7a6741243529c6091da/EBPC23_BlogInline_1098x336_1.jpg)](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/)

[The report](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) provides data driven responses to the following questions: 

- What are the reasons behind why employers are adding new benefits or improving existing benefits?
- What benefits are the most effective for attracting and retaining employees?
- What are the most challenging aspects of benefits administration and how can employers drive better benefits adoption? 

[![EBPC23 BlogInline 1098x336 2](//images.ctfassets.net/6j8y907dne6i/2zREz092C1hW08w49wUKVD/5ec2888c3082ff634ad18e725b9bc96b/EBPC23_BlogInline_1098x336_2.jpg)](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/)

[The report](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) identifies four key trends around how employers are: 

- Adding bonuses, 401(k) matching and other incentives to retain employees
- Offering innovative benefits such as Lifestyle Spending and Medical Travel Accounts and where these can be improved 
- Leveraging benefits to combat employee financial stress
- Utilizing benefits education and working with benefits providers to drive adoption
[![EBPC23 BlogInline 1098x336 3](//images.ctfassets.net/6j8y907dne6i/6Hc7PB81M4DPSUiU0vsKMH/c4f93b79b39632f8149403e099884cd5/EBPC23_BlogInline_1098x336_3.jpg)](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/)

It provides [key action items](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) for brokers and employers to enable them to: 

- Understand what’s most valuable to employees and respond to employee needs
- Identify benefits to add or improve, while staying within budget
- Consider adding Lifestyle Spending and Medical Travel Accounts to further meet employee needs and create an inclusive workplace culture
- Identify benefits providers that support employee education and benefits adoption during open enrollment and all year long 

[![EBPC23 BlogInline 1098x336 4](//images.ctfassets.net/6j8y907dne6i/bnreWfU0LjoSbia6PSsDi/009cada805336fea36e9d0d7f0c3532c/EBPC23_BlogInline_1098x336_4.jpg)](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/)

[Read the full report](https://lively.foleon.com/resource/employee-benefits-pulse-check-2023-sharing/) in order to understand how to choose the most impactful, and cost effective, benefits for employees and to better keep up with client and employee demand during open enrollment and as you plan benefits strategies for 2024. 

Understand the Employee Benefits That Make the Most Impact

Whether you are an HR leader, a benefits broker, or an employee, open enrollment is an important, and potentially overwhelming time of the year. HR leaders need to make sure they have their employee communications and benefits information readily available for employees, and need to plan ahead to make sure everything goes smoothly. Brokers need to be sure that their clients have the information they need about any new benefits offerings or changes, as well as educational materials that can help their clients’ employees make the best decisions for their health. And finally, individuals need to wade through a potentially overwhelming amount of information in order to make decisions that will support them and help them reach their health and financial goals over the next year. 

Lively has put together a wealth of resources to ensure that open enrollment goes smoothly no matter what your role. As open enrollment season gets underway, we wanted to take the time to round them up for you, so you can find the guidance you need during this critical, busy season.

## Guides and glossaries

__Open Enrollment Guide__
Our [open enrollment overview](https://livelyme.com/guides/open-enrollment/) for brokers, employers, and individuals that guides you through answers to the basics questions such as what it is, how to prepare, and what you need to know during and after open enrollment, with links to additional resources.

__Open Enrollment Survival Guide__
For brokers and employers, our easy-to-use [survival guide breaks down open enrollment](https://lively.foleon.com/resource/open-enrollment-faq-survival-guide/) into pre, during, post, phases. It includes key action items and commonly asked questions, as well as helpful, free downloadable checklists, to enable you to effectively maximize engagement, reduce costs, and increase employee satisfaction.

__Glossary of HSA and Health Insurance Terms__
Easy-to-understand definitions to help you, your clients, or your employees better [understand common terms related to health insurance, saving, and spending accounts](https://lively.foleon.com/resource/health-insurance-hsa-terms-glossary/) to make picking the right plan and benefits easier during open enrollment.

## Guidance for brokers and employers

__How to improve your company’s open enrollment process__
If you are struggling with employee engagement during open enrollment, this post outlines [how to prepare and set clear goals and expectations](https://livelyme.com/blog/how-to-improve-open-enrollment-process/) in order to maximize employee benefit sign up.

__A Broker’s Guide to Helping Employers During Open Enrollment__
Open enrollment is often overwhelming for your clients, especially for People and HR teams. These [five tips enable you to ease the burden on your clients](https://livelyme.com/blog/how-brokers-can-help-with-open-enrollment/) and position yourself as a valuable ally during their busiest time of year.

__What new brokers should know about open enrollment__
As a new broker, open enrollment can be a stressful time. [Learn what you need to know](https://livelyme.com/blog/5-things-new-brokers-should-know-about-open-enrollment/) to take the guesswork out of what you need to do by preparing ahead of time.

__Open enrollment preparation checklist for brokers__
These [six steps enable you to start preparing for open enrollment](https://livelyme.com/blog/open-enrollment-preparation-checklist-for-brokers/) in order to drive more business and serve existing and new clients better.

## Open enrollment questions answered

__What are the phases of the open enrollment process?__
A [step-by-step outline for employers to help streamline the open enrollment process](https://livelyme.com/blog/phases-of-the-open-enrollment-process/) and ensure your employees’ paperwork is completed as quickly as possible.

__Why do open enrollment periods exist for health insurance?__
Employees may wonder [why they can’t sign up for health insurance all year long](https://livelyme.com/blog/why-do-open-enrollment-periods-exist-for-health-insurance/). This post breaks down why you can only sign up for insurance during certain times of the year unless you have a qualifying life event. 

__How should I choose open enrollment dates for my company?__
What employers need to consider when [setting dates for open enrollment for health insurance and other workplace benefits](https://livelyme.com/blog/what-to-consider-before-choosing-open-enrollment-dates/), including late enrollment and special enrollment periods.

__How can employees and individuals prepare for open enrollment?__
These five tips [walk you through the open enrollment preparation process](https://livelyme.com/blog/five-tips-to-prepare-for-open-enrollment/), so that you can sign up for the benefits that are best for you.

__How to open an HSA during or outside of open enrollment?__
While open enrollment is a great time to open an HSA if you are signing up for a qualifying high-deductible health plan, as long as you have a qualifying health plan, you can [sign up for an HSA all year long](https://livelyme.com/blog/open-hsa-outside-open-enrollment/). 

## A trusted partner for open enrollment and beyond

If you are looking for a responsive, helpful benefits partner that offers ongoing education and industry-leading support for your clients and their employers, [reach out to Lively](https://livelyme.com/contact-sales/). Our saving and spending accounts, including HSAs, FSAs, HRAs, MTAs, and LSAs, are designed to be easy to use and support benefits adoption and use during open enrollment and beyond. 


Resources for a Successful Open Enrollment

As a financial or investment advisor, your job is to help your clients create the best financial future for themselves and maximize their savings and investments. You can guide them towards lucrative investment vehicles, advise them on where to cut expenses, and help them achieve their long term financial goals. In all the mix of your clients’ assets, one account that shouldn’t be ignored is their Health Savings Account (HSA). 

The tax advantages of an HSA, especially in retirement, make it one of the most critical savings and investment accounts a person can maintain. It can also be an account likely to be forgotten if your client changes employers or ceases to be covered by a High Deductible Health Plan (HDHP). In this post we’ll walk you through the key information financial and investment advisors need to know about HSAs and how they can use these accounts to help their clients plan and build their savings for [comfortable retirement](https://livelyme.com/blog/hsa-bridge-the-retirement-savings-gap/).

## What is an HSA?

An [HSA](https://livelyme.com/guides/hsa-guide/) is an account into which participants contribute tax-free money to pay for qualified medical expenses. Not all providers offer the full range of HSA features or enable account holders to maximize their savings. Some function strictly as savings accounts and earn minimal interest on deposits, while others allow the investment of contributions. Here are the basic attributes of the HSA that make it a financially advantageous account for clients to maintain:

- The account has a triple tax advantage. The money clients contribute is tax-free up to the [annual contribution limit](https://livelyme.com/blog/hsa-contribution-limits/), which is set each year by the IRS. When account holders contribute to their HSA with pre-tax contributions, it also lowers their taxable income. HSA account balances grow tax-free, and the money that is used to pay for qualified medical expenses is distributed tax-free as well, regardless of your age at the time of distribution. That means your clients can save up to 37% on medical expenses, depending on their tax bracket. For example, would you rather your client paid $1,000 for an MRI, or $630?
- Account balances roll over from year to year, building a balance at an average net growth of 25%. This allows your clients to use their HSA to augment their other savings strategies with one that can be used to pay for a medical expense, even in retirement. 
- HSAs begin to function like a [retirement account](https://livelyme.com/blog/hsas-for-retirement/) once the account holder reaches age 65 with one exception: qualified medical expenses remain tax-free. This is especially helpful, because an individual can expect to pay [over $150,000 on health-related expenses in retirement](https://livelyme.com/blog/retiring-how-much-you-will-actually-need-healthcare/) after what’s covered by Medicare. All other distributions from an HSA are taxed at the appropriate income tax rate, which, depending on their retirement income, could come out at a lower tax bracket than when they made the contribution. 
- Your clients own these accounts and can never lose access to their savings, regardless of whether or not they are still working with the sponsoring employer or covered by an [HDHP](https://livelyme.com/guides/hdhp/). It’s true that in order to contribute to an HSA, the account holder must be actively enrolled in an HDHP and that can be their only health insurance coverage. But if they decide to buy different coverage later, they can still use their funds to pay for qualified medical expenses, or resume contributions if they ever elect an HDHP again in the future. As long as they have a balance, those funds can be invested and working for them generating supplemental income for retirement regardless of their health coverage status.
- They can [invest their contributions](https://livelyme.com/features/invest-your-lively-hsa/), ideally growing similar to investments in a 401(k) or IRA. Not all HSA administrators allow contribution investment, and some enforce high minimums that must be achieved before investment is allowed. But, if your client has an HSA like Lively’s, with low or no minimums required, they can invest as much of their money as possible so they can build their medical nest egg faster.
- Clients can use these accounts to pay for expenses for themselves, their spouses and their tax dependents, regardless of whether they are also covered under the same HDHP as your client.

## How HSAs are an essential part of a wealth building strategy

The way HSAs function allows clients to take advantage of favorable tax rules to augment their retirement savings with an account that helps them save money on medical expenses while they build their nest egg for the future. Here’s how HSAs help clients build true wealth:

1. HSAs help clients save money now and later. Since contributions are tax-free, they can help lower clients' income tax burden now while also saving them money on the medical expenses they pay for using their contributions. Clients also save money by buying HDHP insurance coverage since the premiums for these types of plans tend to be less expensive than traditional copay plans. In addition, clients can use their HSA money to pay for medical expenses in retirement tax-free. The average couple retiring today is expected to pay an average of $315,000 in [medical expenses in retirement](https://livelyme.com/blog/retiring-how-much-you-will-actually-need-healthcare/).  The ability  to pay those tax-free is significant
2. HSAs can augment other retirement accounts when contributions are maxed out. All tax-advantaged accounts have an [IRS-imposed annual contribution limit](https://livelyme.com/blog/401k-ira-irs-retirement-contribution-limits/), so if your clients are bumping up against those ceilings and are looking for another savings vehicle (that also has tax advantages), an HSA can be a valuable option.
3. The rollover and triple-tax advantages allow clients to reap greater returns due to compound interest, especially if they can invest their contributions.
4. HSAs allow for efficient use of retirement funds. By having an HSA on hand to pay for qualified medical expenses tax-free (but doesn’t have to be used for that purpose once they reach age 65), gives clients both stability and flexibility. In addition, if clients choose to maximize their HSA contributions and pay for medical expenses out of pocket while saving their receipts, they can reimburse themselves at any point in the future, including in retirement. This enables them to invest the maximum of their HSA funds. Lively offers account holders a digital receipt storage feature, so need to worry about losing receipts. 

## Not all HSA providers offer equal benefits

When advising clients as to the right HSA to participate in, here are some of the things you should look for:

1. Fees. Just like with other retirement accounts like 401(k)s, high fees can significantly cut into clients’ savings and minimize the effect of compounding.  This hamstrings your clients’ ability to build the medical safety net they want and need. The types of fees you should be wary of are administrative or maintenance fees, investment fees, research fees, debit card fees, statement fees, and transaction fees. Not every HSA administrator charges these fees, so look for one with low to no added fees to ensure your clients are reaping the rewards of saving. Lively has no fees for individual account holders. 
2. Ability to invest. The HSA administrator should make investing their contributions simple to find, easy to understand, facilitate API funds flows, inexpensive rates, and have multiple investment options so your clients have the flexibility to choose the right investments for their personal situation.
3. Native mobile apps and online dashboards for easy account management. In order for your clients to get the most out of their HSA, they must be engaged with the account. HSA advisors that make account management easy, and dare we say, fun with clear dashboards and a mobile app, tend to have higher engagement numbers than advisors who don’t.
4. The ability for your clients to electronically roll over or transfer their HSA from a previous employer or advisor. We don’t have to tell you the benefits of having your money in one place. But HSAs are often the “[forgotten account](https://www.thinkadvisor.com/2023/02/10/the-account-people-forget-to-rollover/)” that’s left with a previous employer’s administrator while a new one is opened via a new employer. By having multiple accounts open, clients will be paying more fees for the same services, which will eat into their savings. In addition, they might not have the same investment opportunities with their old HSA administrator, or their accounts could be invested in some of the same funds, which is an inefficient use of their money. Encourage your clients to consolidate their HSAs into one place to take maximum advantage of high quality investments, low fees and the compounding effect of time plus investment growth. 
5. The ability for advisors to manage the investment assets of the account holders. If you typically manage your clients’ other investments, it could be more efficient for you (and beneficial for your clients) if you also managed the investments in their HSA. 
6. Knowledgeable, responsive customer support and tailored, easy-to-access HSA education so that clients get the most out of their accounts. Lively offers dedicated, top-rated customer service via email, phone, and live chat, as well as extensive resources so our customers get the support they need. 

As a financial or investment advisor, you should consider the [HSA a valuable tool to helping your clients achieve real wealth](https://livelyme.com/partners/). It helps them to save money today and in retirement, it provides a tax-efficient investment vehicle and allows them to augment the retirement savings accounts they’re already maxing out. For questions about how Lively’s HSA can help your clients improve their financial picture, [reach out today](https://livelyme.com/contact-sales/).


Providing a competitive benefits package can be a tall order for many employers. While “competitive benefits” has become somewhat of an industry buzzword, in my experience as a people leader, what it really comes down to is offering benefits that make life easier for your employees—and communicating that you value them and have their backs. At Lively, that mindset is at the heart of all we do. The question then comes down to the nuts and bolts of building that kind of benefits package. The administrative lift can vary based on your company’s size and budget. This may mean shopping around for benefits solutions providers or working with your benefits broker to find the providers that are the best fit for your employees’ needs. Overall, in all my years as a people leader, I’ve found what matters and has the most impact over all most is taking a people-first approach. 

## Why it matters

Whether we’re talking about a lean startup, a mid-sized growing business, or a large, established company, employees need and deserve strong benefits. The truth is that benefits make up a big part of the employee experience. If someone is experiencing an issue with their benefits, it’s usually because something significant is going on in their life. There’s a diagnosis or an upcoming surgery, for example, and that’s when they figure out there’s a hiccup with their provider or they don’t have an easy-to-use HSA.

You want everything related to benefits to be as smooth as possible in those trying times so that your employees feel cared for by the company—like their experience matters, because it does. I think every type of company can benefit from taking that view, regardless of size or industry. Benefits that work for your employees help build employee morale, loyalty, and ultimately a strong company culture. 

## Putting employees first while balancing logistics

There’s more than one way to build a robust benefits package. One option is to go with an all-in-one package, for example using the same provider for your insurance and your HSA. That can certainly make things simpler on the admin side, but it isn’t necessarily what’s best for your team. Some parts might be great, but flaws in other areas can lead to major headaches.

For example, let’s say you launch an education campaign to build awareness around high-deductible health plans and HSAs. Helping employees get enrolled is a win-win for everyone. It saves the company money and helps your employees save for the future. If the campaign goes well, it could get a lot more people on board. 

But what do you do if the HSA that came with your health insurance plan isn’t working well? Maybe it’s difficult for folks to access or manage their account, or the provider is using outdated, glitchy tech. This is a bad experience for your employees, who don’t want to be distracted by issues with their HSA.  It can also lead to more administrative work for your team answering employee questions and working on solutions, instead of focusing on other important goals. 

## What it means on the admin side

Choosing a best-in-class tool for each type of benefit makes sense if:

- You want your employees to have the best possible experience using their benefits
- You want to avoid your team being inundated with issues or questions from employees on benefits that should be easy to use
- You don’t want to have to re-evaluate these benefits often, because you know you have the best option available

It may require some upfront work on the back end to get things integrated, but it could set the stage for a much smoother experience. Often, the setup is something your customer success manager or broker will be able to take on or help you with, lightening the load for your team.  Let’s say you have two different benefits systems that frequently send information back and forth. Your benefits broker can be the person who sets this up or sends that report across for you. In that way, it may not actually be a huge lift—and it gives employees the best tools for each benefit they're using.

Choosing best in class benefits is something I’m seeing more and more among younger companies. That’s because their people teams are advocating for their employees and working to find the solution that is right for them, not only a solution that makes the people team’s life easier. This is important for employee happiness and, ultimately, retention of the team you’ve worked hard to build.

## How it affects recruitment and retention

I will say that it’s more common among traditional industries and larger companies to go with an all-in-one package for benefits, even if it isn’t the best choice for employees. Some companies just want to set it and forget it. That means one provider for all benefits, which may mean that  the HSA, or other savings and spending accounts, such as Lifestyle Spending or Medical Travel, might not be so great.

But more businesses are beginning to focus on employees. That’s a good thing because employees are getting used to having tools and systems that work for them, instead of solutions that just work for the admins. Ideally, you find solutions that provide both a great employee experience and an easy admin experience. That’s becoming the expectation now as people transition to new employers. At Lively, we want to provide resources that best serve our employees. That might mean more work behind the scenes for benefits brokers—or maybe it’s just a one-time setup or integration, and then you don’t have to worry about it again. Either way, it’s worth it to give employees the best tools.

Ready to learn more? [See how Lively can help](https://livelyme.com/employers/) your business provide the benefits your team needs.


Building a Sustainable People-First Benefits Package: Balancing Employee Benefits and Admin Lift

Americans are woefully financially underprepared for retirement. According to the National Retirement Risk Index, about [50%](https://www.forbes.com/sites/johnwasik/2023/07/10/coming-up-short-in-retirement-why-people-will-not-have-enough-money/?sh=77068c3c7da9) of working age Americans won’t be able to maintain their pre-retirement standard of living if their saving levels don’t increase. The gap between what those Americans have saved and what is estimated they will need is called the “retirement gap” and is estimated to be about [$7 trillion](https://www.bloomberg.com/opinion/articles/2022-03-28/the-u-s-retirement-crisis-is-a-financial-crisis-too?in_source=embedded-checkout-banner).

In this post, we’ll explore the reasons why the gap exists and how HSAs are crucial to helping workers set themselves up for retirement, even if they have a 401(k).

## What is the “retirement gap”?

The retirement gap is the difference between what it is estimated workers should have saved (based on their salaries and age) in order to maintain their pre-retirement lifestyle. Fidelity [recommends](https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire#:~:text=Key%20takeaways,hope%20to%20have%20in%20retirement.) that workers aim to save at least one year’s salary by the age of 30, 3 years’ salary by the age of 40, 6 years’ salary by the age of 50, 8 years’ salary by 60 and 10 years’ salary by 67. 

The amount of savings individual workers will need will depend on a wide variety of factors including, but not limited to, the lifestyle they want to lead, whether or not they own their home free-and-clear once they retire, and their healthcare needs. In fact, healthcare needs alone are expected to take up a big chunk of retirees’ savings. In fact, the average 65 year old couple retiring in 2023 can expect to pay an estimated [$315,000 in medical bills](https://www.businesswire.com/news/home/20230621969160/en/Fidelity%C2%AE-Releases-2023-Retiree-Health-Care-Cost-Estimate-For-the-First-Time-in-Nearly-a-Decade-Retirees-See-Relief-as-Estimate-Stays-Flat-Year-over-Year) over the course of their retirement. 

The recent National Retirement Risk Index found that 47% of all workers weren’t saving enough, and the households at greatest risk were those where the head of household was aged 30-39 years. The reasons are many, but most boil down to the recent economic climate, including the Great Recession and the Covid pandemic, and the fact that many people’s retirement strategy hinges on contributing to a 401(k). 

## Why 401(k)s shouldn’t be workers’ only savings vehicle

When most people hear the phrase, “retirement savings account,” they automatically think of a 401(k). That’s because the 401(k) has become the dominant retirement savings vehicle since the [1970’s](https://www.ebri.org/docs/default-source/fast-facts/ff-318-k-40year-5nov18.pdf) when the account type was created. It was [modeled after the pension](https://iconsavingsplan.com/blog/retirement-planning/why-we-need-an-alternative-to-the-401k/) and meant to provide workers that stayed at a company for a long time, a way to save for retirement. But here are some statistics on how the 401(k) is functioning in today’s work environment:

- In 2020, [40%](https://iconsavingsplan.com/blog/retirement-savings/why-dont-81-million-americans-have-a-retirement-plan/) of the workforce participated in a 401(k).
- In 2021, [68%](https://www.bls.gov/opub/ted/2021/68-percent-of-private-industry-workers-had-access-to-retirement-plans-in-2021.htm) of private industry workers had access to any retirement plan, only 51% chose to participate. 
- [$92 billion](https://iconsavingsplan.com/blog/retirement-planning/why-we-need-an-alternative-to-the-401k/) is cashed out of 401(k)s every year at job change.
- Approximately [58 million](https://www.mckinsey.com/featured-insights/sustainable-inclusive-growth/future-of-america/freelance-side-hustles-and-gigs-many-more-americans-have-become-independent-workers) Americans that are gig workers (38% of all workers) are locked out of participating in a 401(k).

The 401(k) is a great savings vehicle if the worker has access to one through their employer (especially if that employer matches contributions), and if that worker stays at their employer for many years. But once the worker leaves their employer, they lose the ability to contribute to their 401(k). Their options are:

1. They can roll their account into a new 401(k) if their new employer offers one, and their plan allows rollovers. There is sometimes a fee associated with this.
2. They can roll their account into an IRA.
3. They can cash out their balance (and pay a [hefty tax penalty](https://www.irs.gov/retirement-plans/hardships-early-withdrawals-and-loans)).
4. They can manage multiple retirement savings accounts from multiple employers. That means they’re paying fees on multiple accounts, and can be invested multiple times in the same funds.
5. They can abandon their account.

Right now, the average millennial and gen Z workers stay at a company for [2.75 years](https://www.gallup.com/workplace/231587/millennials-job-hopping-generation.aspx). In addition, 38% of all workers are considered 1099 employees and are thus ineligible to participate in a 401(k). That means a large percent of the working population needs a way to save for retirement (especially medical care in retirement) that is portable and flexible. That’s where an HSA comes in.

## Why an HSA is an essential part of every workers’ retirement savings strategy

A [Health Savings Account (HSA)](https://livelyme.com/guides/hsa-guide/) is a powerful savings tool that can be used in the present moment to pay for qualified medical expenses and to save for the future. Here are the HSA basics:

- Contributions made to HSAs receive a triple-tax advantage from the IRS. They are tax-free the year they’re made, they grow tax-free and when they’re used to pay for [qualified medical expenses](https://livelyme.com/whats-eligible/), those distributions are tax-free as well (even in retirement).
- The only requirements for contributing to an HSA are: participants are covered by a [High Deductible Health Plan (HDHP)](https://livelyme.com/guides/hdhp/), they are 18, they are not considered a dependent on someone else’s tax returns, and they are not enrolled in Medicare. That means 1099 workers are free to use this account to save.
- The HSA balance rolls over from year-to-year enabling account holders to build a medical safety net.
- Account holders own their accounts so they never lose access to their HSA, even when they leave their employer. They can also use their savings to pay for qualified medical expenses once they’re no longer covered by an HDHP. However, they must be covered by an HDHP, and that must be their only insurance coverage, in order to contribute to their account.
- Once participants reach age 65, the HSA converts to a traditional [retirement account](https://livelyme.com/blog/hsas-for-retirement/) in that savings can be used for everyday expenses. Qualified medical expenses remain tax-free and everything else is taxed at the appropriate income tax rate.
- [Contributions can be invested](https://livelyme.com/features/invest-your-lively-hsa/), allowing participants to grow their account balances at the rate of the market.

If workers have access to and are participating in another form of retirement savings account(s), an HSA can help augment those accounts by providing them a tax-free way to pay for medical expenses in retirement, as well as giving them another tax-advantaged savings vehicle if workers are bumping up against their [annual retirement contribution limit](https://livelyme.com/blog/401k-ira-irs-retirement-contribution-limits/). In addition, HSAs give workers that don’t have access to a 401(k) a way to save for retirement. 

An HSA can be a powerful savings tool and should be a part of every worker’s retirement savings strategy. If you have questions about how Lively can help you, your employees or your clients to save for retirement (as well as on qualified medical expenses), [reach out to us today](https://livelyme.com/).

How HSAs can Help Americans Bridge the $7 Trillion Retirement Savings Gap

HSAs are a great employee benefit. They also have some nice perks for employers, like helping them attract and retain top talent—all while reducing healthcare costs. The challenge for HR leaders and benefits professionals often lies in finding the right HSA provider. 

I’ve worked in the employee benefits space for a long time and love being Lively’s VP of People. That’s because we’re a benefits solutions provider that genuinely wants to make it easier for employers and individuals to manage their HSAs. It goes hand in hand with our mission of helping people embrace a healthy future. Here are a few important things to look for in an [HSA provider](https://livelyme.com/).

## A smooth rollout

Launching an [HSA program](https://livelyme.com/guides/hsa-guide/) can be a tall order. The right benefits solution provider is one that can help streamline the process. It’s probably wise to launch an HSA education campaign beforehand so that your [employees understand how it all works](https://livelyme.com/blog/employee-hsa-adoption/). That includes the advantages that HSAs bring to the table, as well as the logistics of signing up. It’s an important piece that’s often overlooked when new benefits are being implemented. 

Beyond that, you want an HSA provider that has a reliable, easy-to-use product. If not, your internal benefits team will likely be flooded with employee questions and concerns, which can eat into their time and focus. In a past role before [I came to Lively](https://livelyme.com/blog/meet-our-vp-of-people/), I had an experience where an HSA program was rolled out and then didn’t work properly. Employees had issues with everything from checking their balances to using their HSA cards. My team had to work overtime to [find a new HSA provider](https://livelyme.com/resources/employer-hsa-selection-guide/) that could meet our needs. 

## Tech solutions that make life easier

Technology is ever evolving, but not all HSA providers are keeping up. The industry has a reputation for antiquated tech and outdated systems. One of the reasons Lively was founded was to make HSAs, and benefits solutions, straightforward to access and use, and an important way to do this was to bring the technology that powers them into the 21st century. Our easy-to-use platform is all about keeping things simple. It’s a user-centered experience that includes paperless onboarding and a top-rated mobile app. In other words, it’s a modern way to manage your HSA.

The thing with employee benefits is that after [enrollment](https://livelyme.com/guides/open-enrollment/), you shouldn’t be hearing about them from your employees all that much. It means they’re going about their lives and using their benefits without any issues. But if your HSA provider has glitchy tech or a cumbersome platform, you can bet that it’s going to cause disruptions for your employees and for your People/HR team.

## Customer service you can count on

Your HSA provider shouldn’t leave you flying blind. Whether it’s an employee trying to get in touch to ask a question or the employer trying to troubleshoot an issue, connecting with your provider should be easy. Not only that—they should be ready and able to provide support. With regard to the not-so-great HSA rollout I experienced a while back, poor customer service was perhaps the biggest hurdle. Employees were coming to my team in droves complaining about their inability to get any real help from the HSA side. 

This was especially frustrating because we’d worked hard to educate folks about HSAs and get them enrolled. Now here they were struggling. If people have an issue, they should be able to get the answers they need, whether that’s through self-service on the platform or website or calling member support. It’s so important to have that good customer service, and that's something I'm really proud of here at Lively. All employers, no matter what size, have access to a dedicated Customer Support Team. We’re here to walk you through whatever you need. That includes everything from general questions to specific issues, big and small, for both the employers and account holders that work with us.

## Affordable pricing

Including an HSA in your employee benefits package shouldn’t break the bank. At Lively, you can expect clear, transparent pricing. That means no hidden fees or tricky cost structures. We charge a flat rate per employee, per month. Since Lively started, we’ve saved our account owners over $8 million in fees, which I’m really proud of. So, when comparing HSA providers, be on the lookout for unclear pricing or excessive or hidden fees. They’re probably red flags. 

If you’re booking to partner with a benefits solutions provider who’ll have your back, [reach out to Lively](https://livelyme.com/contact-sales/) today.


What to Look for in an HSA Provider—and Why You Should Switch

For financial institutions that are looking for new revenue streams or ways to reach new customers, and retain existing ones (both commercial and retail), offering a Health Savings Account (HSA) can be a crucial piece of your business strategy. HSAs, and their corresponding High Deductible Health Plans (HDHPs) are fast becoming the most popular way U.S. workers and employers alike can save on health insurance costs while simultaneously improving employees’ financial health. 

In fact, over [55% of private sector workers](https://www.valuepenguin.com/high-deductible-health-plan-study) are enrolled in an employer-sponsored HDHP. But only [24% also participated](https://www.kff.org/report-section/ehbs-2022-section-8-high-deductible-health-plans-with-savings-option/#:~:text=ENROLLMENT%20IN%20HDHP%2FHRAS%20AND%20HSA%2DQUALIFIED%20HDHPS&text=Enrollment%20in%20HDHP%2FSOs%20has,HSA%2Dqualified%20HDHPs%20in%202022.) in an HSA alongside their HDHP plan. This presents a big opportunity for banks to step in and offer an HSA product that will help current and potential clients save for healthcare expenses and even retirement. In fact, after age 65, HSA account holders can continue to withdraw money from their account tax-free for qualified healthcare expenses and on any other type of expenses at their current tax-rate. 

But not all HSA providers are the same and thus they won’t extend the same benefits to businesses and their employees, or the financial institutions that offer them. Offering an HSA product can take time and precious resources from other projects, so if financial institutions want their product to bring the most value to the bank, they’ll need a partner that can do much of the heavy lifting when it comes to plan administration, onboarding, customer service, and more. 

## What are your options when offering an HSA?

Whether you’re looking to offer an HSA product for the first time, or offer a better HSA product than you do currently, consider the best practices below to help guide you in selecting the right HSA partner.

When offering an HSA, financial institutions have four general options:  

1. __An in-house demand deposit account.__ Building and maintaining an in-house HSA takes a lot of time and resources (especially to do it right) and usually results in a non-competitive product that functions more like a checking account than a dynamic savings and investment account. It lacks the capabilities required to be competitive like claims integration, digital receipt storage, engaging education, employer platform functionality, and APIs for payroll and benefit administration integration. It further requires a dedicated team of customer service employees, compliance officers who can offer deep industry knowledge and guidance around federal HSA guidelines, and operational oversight on a daily basis, all of which adds to the overhead stripping away any potential for profit.
2. __Software Purchase.__ You can buy a ready-made HSA solution with existing technology platforms. However, they can be incredibly expensive and offer no opportunity to hold deposits, keep interchange, obtain customer data, or generate revenue. These platforms are not customized or branded to your institution and come with additional requirements to staff a team, including sales and customer service representatives, to manage these solutions internally, which adds to the overhead expense.  
3. __Selling your book of business.__ You can outsource your HSA product and in doing so, sell your book of business, along with its deposits and revenue potentials, to another financial institution that is offering a more modern HSA product and may also cross sell other financial products that you already offer.
4. __Partner with an HSA provider to offer a cobranded product with a personalized approach and a cohesive customer experience.__ You’re looking for a partner with a proven track record of existing banking relationships for reference, engaged account holders and employer groups, and a platform that both fully integrates with your current systems and can be branded to the bank. 

Of these options, a true partnership solution is the most advantageous. It will remove all of the overhead within the bank on the HSA product, from tax reporting to operations to compliance. In addition, it will not only provide marketing collateral and distribution assistance, but will help your internal commercial teams close HSA sales and drive net-new customers into the bank to build new relationships. 

A true partnership can, and should, offer an HSA product that allows you to retain all of the core deposits, interchange revenue, and fee revenue while having access to all customer data for relationship building and cross-sales. The best HSA partnerships should allow your institution to offer a competitive solution for market differentiation, customer acquisition, deposit growth, and revenue with minimal lift on the bank itself.

## Not all providers are created equal - how to find the right fit for your institution

For a successful HSA partnership that ensures you will maximize the benefit of offering an HSA, look for an HSA administrator that offers a partnership model. That means the financial institution serves as the custodian for the HSA accounts and enjoys the benefits of co-branded cards and web portal experience, while the HSA administrator handles plan administration, customer education, onboarding, customer service, compliance maintenance, sales and marketing support and more. 

In order to implement, sustain, and grow an HSA offering, financial institutions need to look for an HSA partner that exhibits these characteristics:

- Allow you to hold the deposits and keep the interchange, spread, and fee revenue.
- Easily integrate into your current systems infrastructure.
- Help you build a plan to achieve strategic goals and objectives each year, including clear and actionable reporting features and an easy-to-use dashboard for online account management.
- Include comprehensive customer support, onboarding, and extensive resources for internal staff as well as customers, including compliance help and communications when regulatory changes affect HSAs.
- Offer transparent pricing so that you understand the true cost of offering the product, both to the bank and the customer. Make sure to ask for the fee schedule. It should include the fees that will be charged, when they will be charged and ways to avoid being charged fees.
- Enable you to expand relationships with existing customers and provide enablement resources to help sell the HSA. 
- Offer advanced technology including analytics, AI, and machine learning to help you run reports, spot and react to trends, solve problems and develop new products.
- Have strong market intelligence and understand how your HSA competes against both local institutions and “big banks.”

For your customers, both commercial and retail, look for an HSA partner that offers: 

- An easy-to-use platform that helps users easily understand their account balance, saving, and spending. 
- At least one investment option (Lively has two that cater to different comfort levels with investing).
- Data integration with other business units including customers’ HR information systems, payroll, benefits administration, etc. 
- Account holder and client education to enable you to empower customers with the relevant information to effectively use their accounts to meet their unique financial goals.

## Lively HSA: A different kind of partnership

With a [Lively partnership](https://engage.livelyme.com/fi-contact-us), you are the custodian of your HSAs. You hold the deposits, collect fee income, and we take care of the rest. We handle risk mitigation and compliance support, plan administration including onboarding, customer support, account management, internal partner enablement and staff education.

We price our partnership solution so that financial institutions get the greatest ROI on their HSA. Our fee schedules are clear, transparent, and include no hidden fees.

[Our HSA](https://livelyme.com/partners/) is also a top-rated product that has been expressly designed with the user at the top of mind. It includes a mobile app, account holder and employer dashboards for easy account management, two different investment accounts as well as a savings account option, debit cards and unparalleled customer service for both employers and account holders. We also offer co-branded sales enablement materials and knowledgeable sales professionals to help you expand relationships and close deals.

HSAs are long-term, portable accounts that allow financial institutions to establish lifelong relationships with their customers. Given the rise in the cost of medical care year-over-year, as well as the retirement savings gap in the U.S., HSAs are not just another way to save money. They can be an integral piece to the financial wellness puzzle for current and potential customers, enabling them to save for healthcare costs today and in retirement. Offering an HSA product now, establishes your financial institution as an essential partner to them and the generations of savers that come after them. HSAs are the future of financial wellness, now is the time to get on board. 

If you'd like to discuss how a Lively partnership could benefit your business, [reach out today](https://engage.livelyme.com/fi-contact-us).


If you’ve decided to implement a [High Deductible Health Plan (HDHP)](https://livelyme.com/guides/hdhp/) as part of your benefits package, congratulations. These plans can help companies lower their benefits spend as well as increase employee satisfaction with company benefits offerings (which can increase their [satisfaction in their job](https://www.pewresearch.org/social-trends/2023/03/30/how-americans-view-their-jobs/)). But in order for the implementation strategy of your HDHP to be successful, you need to ensure employees adopt it. 

Here are the four necessary steps to ensuring implementation success: 

- Offer a [Health Savings Account (HSA)](https://livelyme.com/guides/hsa-guide/) with your HDHP
- [Educate your employees](https://livelyme.com/blog/employee-hsa-adoption/) as to the benefits of participating in this type of health insurance and savings account
- Commit to making an employer contribution to employees’ accounts (and get employees to commit to contributing as well)
- Make sure your HSA has built-in flexibility

We’ll go into the details below.

## 1. Offer a Health Savings Account

While HDHPs typically have the lowest monthly premiums of all the traditional group health insurance options, they also tend to have the highest deductible. The minimum deductibles for these types of plans are set each year by the IRS and adjusted annually for inflation. Higher deductibles can make employees hesitant to sign up for an HDHP, even though preventative care is 100% covered regardless of whether or not the plan participant has met their deductible. That’s where an HSA comes in.

HSAs are the corresponding benefit to HDHPs. Plan participants can only sign up for an HSA and contribute to this account while they are actively enrolled in an HDHP (as long as it’s their only health insurance coverage). These accounts were formed as a way for HDHP participants to save for their deductibles and other health care costs tax-free. Their savings grow tax-free and whatever they spend on qualified medical expenses is tax-free as well (this is known as the triple tax advantage of HSAs). Employees own these accounts so their contributions never expire and roll over from year-to-year, enabling them to build a health safety net. And when employees retire, they still get to keep their HSA, only it begins to function as a traditional retirement account. That means employees can use their contributions on whatever they want, paying no income tax on distributions for qualified medical expenses and the appropriate income tax rate on everything else.

These attributes of an HSA can help ensure your implementation of your HDHP will be a success:

- Increased adoption of your HDHP because now they have a [tax-advantaged way to save](https://livelyme.com/hsa-savings-calculator/) for their deductible. 
- Increased engagement with the HDHP because now they have a tax-free way to save and pay for out-of-pocket medical expenses.
- Increased employee satisfaction with company benefits because HSAs are a [highly popular benefit](https://www.hrmorning.com/articles/the-difference-between-fsas-and-hsas/) on their own.
- [Increased cost savings](https://livelyme.com/payroll-tax-savings/) because the more employees that sign up for your HDHP, the lower your monthly premium cost. In addition, the money employees contribute to their HSA is taken out prior to their income tax assessment, which can lower your FICA responsibility.  

## 2. Educate employees on the benefits

In order for employees to get the most out of their benefits, they have to know what’s available and how to use it. If this is the first time your company is offering an HDHP with an HSA, there’s a chance your employees aren’t familiar with this type of benefit. So make sure you create clear communication collateral for open enrollment that highlights attributes of an HDHP/HSA combination and how it can benefit your employees. 

Once employees have signed up for this plan, distribute ongoing education pieces throughout the year, reminding employees how much they can save, what they can use their HSA for, and more. Here are some of the high points your communications should touch on:

- They must be enrolled in an HDHP (and it must be their only health insurance) in order to contribute to an HSA.
- 100% of a long list of [preventative care](https://www.hhs.gov/healthcare/about-the-aca/preventive-care/index.html#:~:text=Blood%20pressure%2C%20diabetes%2C%20and%20cholesterol,baby%20and%20well%2Dchild%20visits) is covered prior to the deductible being met.
- HSA contributions are tax-free in the year they’re made, they grow tax free and distributions made for qualified medical expenses are tax-free as well.
- The [annual contribution limit](https://livelyme.com/blog/hsa-contribution-limits/) for individual and family plans (which are set by the IRS each year) and an additional $1,000 catch-up for anyone 55 or older.
- How much the company will be contributing (either matching or a flat contribution) to each employee’s account.
- Employees can choose to keep their contributions in a savings account or [invest them in the marketplace](https://livelyme.com/blog/can-i-invest-my-hsa-money/) (as long as your HSA administrator provides this service), which can empower them to grow their savings at an even faster rate.
- They can adjust their HSA contributions at any time.
- They own their contributions, so even if they lose the ability to contribute to their account because they are no longer covered by an HDHP, they can still use their previously contributed money for out-of-pocket medical expenses.
- Any pertinent information employees need to know about onboarding and accessing their account.

## 3. Commit to an employer contribution

Committing to a contribution takes two steps. First, as an employer, you should consider whether or not you want to contribute to employees’ HSAs. Studies show that employees are [more likely to contribute](https://www.alegeus.com/insights/employer-contributions-to-hsas-improve-the-employee-healthcare-experience/#:~:text=Employer%20contributions%20also%20influence%20how,balance%20goes%20up%20to%20%242%2C132.) to HSAs (and to contribute more) when their employers also make a contribution to their account. So if it’s in your employee benefits budget, it’s worth considering offering an employee contribution match or a flat annual sum for each employee’s HSA. 

In addition, as part of your ongoing employee communication, you can remind employees to treat their HSA contribution goal as a financial goal. Encourage them to “commit to contributing” every month or set up automatic contributions. This can help keep employees engaged with the HSA and remind them of the benefits of saving, at times when it could be tempting to divert the money they’re contributing to other areas. If possible, work with a provider that enables employees to contribute directly from their paychecks, pre-tax, in order to make contributing as easy and beneficial as possible. 

By encouraging employees to contribute as much as they can to their HSA, you could increase their engagement with the account, as well as your FICA cost savings and you could increase employee satisfaction with the benefit (every time they see their account balance has gone up, they will get a little [hit of dopamine](https://www.usbank.com/financialiq/manage-your-household/personal-finance/how-having-savings-gives-peace-of-mind.html)). 

## 4. Allow for flexibility

One of the most attractive attributes of an HSA is its inherent flexibility in design. Your HSA should be able to work for any employee at all times. That means you should build these features into your plan design and communicate said features in your [employee education](https://livelyme.com/blog/employee-hsa-adoption/) pieces:

- Employees should be able to increase, decrease or pause their contributions at any time.
- They should be allowed to invest their contributions (and as much of their contributions as they want), so look for an HSA provider like Lively that has this capability.
- Employees should be given a debit card for point-of-sale purchases.
- The HSA provider should offer an app for account management on-the-go.
- There should not be a time limit for reimbursements as long as the expenses were incurred after the HSA was active. 

To help your employee education, we've compiled the more [frequently asked questions that employers get asked about HSAs](https://livelyme.com/guides/top-hsa-questions/) so you are equipped to provide your employees with comprehensive answers. 

## How Lively can help

Lively is your partner in creating the most comprehensive benefits package for your budget. We offer best-in-class UX design and customer service and our [HSA beats the industry average](https://livelyme.com/blog/hsa-snapshot-report/) for contributions every year. If you’re ready to level-up your benefits offerings, [reach out today](https://livelyme.com/contact-sales/).


Ways You Can Implement a Successful High Deductible Health Plan Strategy

At Lively, we’re all about making HSAs more accessible and easier to use. That’s no small thing considering that only 17% of employees without HSAs are saving for future healthcare expenses, according to a 2022 [Bank of America report](https://business.bofa.com/content/dam/flagship/workplace-benefits/id20_0901/documents/2022-WBR.pdf). Encouraging employees to adopt HSAs makes sense for employers, too. It can be a powerful recruitment and retention tool that makes for happier, healthier employees. There are also some financial benefits for employers.

This is all to say that HSAs can be a win-win for everyone. In my experience, it comes down to getting your employees to see their value and removing any barriers to enrollment. At Lively, we tackle that in a few different ways. As Lively’s VP of People, I’ve seen what can happen when employers prioritize HSA education. Here’s what that looks like in practice.

## Driving adoption is critical but easy to overlook

You may have put a lot of time, energy, and good intentions into your benefits program—and that’s great! Putting employees first is always the most important thing. But even the best HSA program can have a lackluster reception if employees aren’t made aware of how it works. Driving adoption is key, but it’s often a missing step when an employer rolls out new benefits. 

To help drive benefits adoption, it’s helpful to put yourself in your employees’ shoes. As an employee, being presented with a comprehensive benefits plan might feel overwhelming, especially if there’s a lot of information to sort through. At Lively, HSA education is folded into employee onboarding. We cover everything from how they work to the nuts and bolts of enrollment. Building out a simple education campaign can go a long way. The goal is to drive home the [benefits of HSAs](https://livelyme.com/guides/top-hsa-questions/) and support employees in signing up. 

## How Lively educates our employees about HSAs
Again, HSA education is baked into the employee experience at Lively. Adoption is high because our employees understand what an HSA is and how it works. That’s an important detail that directly drives enrollment. We share information about:

- [High-deductible health plans](https://livelyme.com/guides/hdhp/) and how they work with HSAs
- How to [enroll in an HSA](https://secure.livelyme.com/signup/start?_ga=2.241872133.662509266.1690813854-921911386.1667409125) and manage it using the Lively platform

We also discuss the perks of an HSA, which include the ability to:

- Deduct HSA contributions on your federal tax return
- Enjoy tax-free [investment gains](https://livelyme.com/blog/can-i-invest-my-hsa-money/)
- Avoid paying taxes on withdrawals that are used for [qualified medical expenses](https://livelyme.com/whats-eligible/)
- Use HSA funds as taxable [retirement income](https://livelyme.com/blog/hsas-and-retirement-what-you-need-to-know/) once you turn 65 

How you share HSA information is up to you. You might opt for an interactive workshop (in person or virtually) where employees can ask questions and sign up on the spot, a series of email campaigns educating them on different aspects of HSAs and walking them through the signup process, a resource hub with self-guided training, or benefits offices hours, where employees can drop in and ask questions. Whichever approach you choose, you’ll want to do this during new hire onboarding and again each year during Open Enrollment. Often, your benefits broker will be willing to partner with you or to run these sessions themselves, and to provide materials for you to use to educate your employees.

## Reasons to contribute to employee HSAs

Employers have the option to contribute to HSAs on behalf of their employees. This is something Lively does for a number of reasons. 

### It can help you attract the best talent

Benefits always matter; even more so in a competitive job market. The truth is that employees care about more than just their salary. They’re also looking at benefits like health insurance, paid time off, parental leave policies, flexible work arrangements, and more. HSAs are a valuable part of this package. They show potential new hires that you’re ready to invest in their well-being—along with their financial health—if you’re willing to contribute to their HSAs. That [Bank of America report](https://business.bofa.com/content/dam/flagship/workplace-benefits/id20_0901/documents/2022-WBR.pdf) mentioned earlier found that when an HSA is offered, 89% of employers make a contribution.

### It can go a long way in terms of employee retention

Offering robust employee benefits isn’t just good for recruitment. It can also set the stage for employee satisfaction and loyalty. To qualify for an HSA, employees must be enrolled in a high-deductible health plan. These usually have lower monthly premiums when compared to low-deductible plans. Some employers will pick up the cost themselves to encourage employees to choose that plan and adopt an HSA. It’s another worthwhile employee benefit to consider.

### It can help employers save money

Opting for a high-deductible health plan will likely lead to lower premiums—and reduced healthcare costs for employers. You might choose to redirect some or all of those savings toward employee HSA contributions. What’s more, these contributions count as a tax-deductible business expense for employers. When taken together, it’s easy to see how HSAs can help companies save money while they support their employees.

Getting your employees on board with an HSA doesn’t have to be complicated, but it will likely require some time and attention upfront. The end result is usually worth it. [Connect with Lively](https://livelyme.com/contact-sales/) to bring your benefits package to the next level.


How the Fastest-Growing HSA Provider Gets Their Employees to Adopt HSAs

Every so often external forces require an industry to change. Presently, the headwinds of inflation, higher interest rates, macroeconomic volatility, a [precipitous drop off](https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/five-ways-to-drive-experience-led-growth-in-banking) in mortgage originations and shifting customer practices are bearing down on financial institutions. According to a recent [report](https://www.mckinsey.com/industries/financial-services/our-insights/firing-on-all-cylinders-in-north-american-commercial-banking) from McKinsey, bank profits reached a 14-year high in 2022, but only 35% of banks globally saw returns above the cost of capital. To weather the current environment, financial institutions need to reevaluate the way they’re doing business. 

This includes reimagining their customer journeys by offering new products that bring cross-selling opportunities, partnering with their commercial customers to help them better operate their businesses, providing a modern, digitized customer experience and comprehensive support. Partnering with a commercially competitive [Health Savings Account (HSA) provider](https://livelyme.com/), especially one that meets and exceeds customers’ expectations for ease of use, can help financial institutions achieve these goals. 

## How HSAs help financial institutions meet the current moment

Customers, both commercial and retail, want to see something new from their current financial relationships. They want services to be simple, intuitive, digitized, and all in one place. They want personal, human, and responsive customer service, not a call center or chat bot, and they want a true partner in operations. They want built-in education to help account holders understand what an HSA is, how it works, and what they need to do to get the most out of the product. They want many of the things as business owners that they expect as a retail customer. In fact, the lines between retail and commercial customers are often blurred since [90%](https://www.bai.org/banking-strategies/attract-small-businesses-with-a-holistic-banking-experience/) of small business owners keep their personal account at the same bank as their business account. 

One way financial institutions can better retain, engage, and increase commercial business and win a larger share of their wallet is by offering a tech-forward HSA.  

HSAs provide businesses of all sizes with many advantages. These include: 

- __HSAs help businesses cut costs.__ Supply chain issues and inflationary pressure have many organizations looking to reduce their expenditures, and the cost of employing workers is right at the top of that list. A [majority of employers](https://www.axios.com/2022/09/19/employer-health-costs-premiums-workers) expect that these costs will continue rising and the trend of high prices will persist. HSAs are paired with [High Deductible Health Plans (HDHPs)](https://livelyme.com/guides/hdhp/), which typically have the lowest annual premiums of the traditional health insurance options. The high deductible can give employees pause, but when paired with an HSA, the account provides an incentive for employees to choose the more affordable health insurance plan. That’s because HSAs give workers a way to save for the higher deductible tax-free. By giving employers a solution to increase adoption of their HDHP, financial institutions can help them lower the cost of employment, which helps them attract and retain top talent, while reducing operational costs.  
- __Providing an enterprise-level HSA solution with automated functions like enrollment or payroll contributions can help finance and HR teams save time, reduce errors, and ensure a better employee experience.__ Many small and medium sized businesses have lean finance and HR departments. That means they need an easy way to manage their everyday operations. By offering an HSA through the same financial institution they already bank with, it reduces the vendors with which they have to interact and can help solidify customer loyalty.
- __HSAs help businesses recruit and retain talent.__ Many small and medium-sized businesses have a difficult time competing with larger organizations for talent. In addition, employers of all sizes are working hard to retain talent, as losing employees means a loss of productivity, intellectual capital, and can cost more than half an employee’s salary to replace them. But by offering an engaging, tech-forward HSA that offers features like investment options and account holder education, businesses can differentiate themselves in the labor market.

Offering an HSA also provides many advantages to financial institutions, especially for commercial customers. These include: 

- __They provide financial institutions with a pathway for cross-selling.__ If you offer an HSA to employees that are not current customers, and you perform well, you establish a positive relationship and have the opportunity to woo them from their current banking relationship. If you’re unsure how large of a demographic these customers represent, according to a recent [study](https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/five-ways-to-drive-experience-led-growth-in-banking) by McKinsey, people are currently 2x more likely to open a new account than they were in the past, 15% are open to a new banking relationship and 20% are considering switching their banking relationships. In addition, [BAI ](https://www.bai.org/banking-strategies/attract-small-businesses-with-a-holistic-banking-experience/)found that half of the small businesses they surveyed at the end of 2022 expected to change their financial services relationship in the next two years. 
- __HSAs give financial institutions a new revenue stream that can increase the overall lifetime value of each customer.__ Banks and other financial institutions can earn revenue through net interest margin, interchange and employer administrative fees.

## Why your commercial customers already want an HSA

Selling an HSA to your current customers won’t be a difficult task because [more than half](https://www.benefitspro.com/2023/02/20/hdhp-enrollment-reaches-more-than-50-of-american-private-sector-workers/?slreturn=20230614181815#:~:text=A%20record%2Dhigh%20number,2021%2C%20an%2083.7%25%20increase.) of Americans are already enrolled in an HDHP and are looking for ways to cut down on healthcare costs. These types of plans are growing in popularity because they offer the lowest monthly premiums and the greatest flexibility in terms of where employees spend their healthcare dollars. 

Offering an HSA alongside an HDHP is essential to both securing employees’ adoption of the health insurance plan, but also in financially supporting their physical and financial health. That’s why a majority of HSAs are sourced through an employer.

In fact, [over 55% of US employers offer an HDHP](https://www.valuepenguin.com/high-deductible-health-plan-study), so many of your customers are looking for an HSA for the first time, or they’re looking for a better one. Offering your customers a competitive HSA not only strengthens your relationship and opens the door to cross selling new products, but keeps the deposits, net interest margin, and fee revenue gained from HSAs from going to a competitor. 

## Why commercial customers need an alternative to traditional HSAs 

Most HSAs offered by banks are focused on the individual account holder and aren’t equipped with an employer platform that enables administration of, and insight into, the plan. Without an employer dashboard that can run custom reports, APIs for benefits administration integration and payroll integration, census management, contribution management, education, and transparency, you won't be set up to serve and grow with your commercial customers. Because the majority of HSAs are sourced through employers, you want to make sure you are set up to serve their needs to offer the most competitive HSA and ensure it is easy for employers to administer and manage, as well as simple for employees to use. 

Most traditional HSAs, including those offered by many financial institutions, are not equipped with built-in education that enables HR professionals to help their employees to get the most out of an HSA. While HSAs have existed for 20 years, many people confuse them with other tax-advantaged accounts like FSAs or HRAs. They also don’t understand that HSAs are designed for long term savings, causing them to ultimately miss out on the benefits these accounts provide from both a cost savings and financial planning perspective. Working with a provider that provides educational materials for HR administrators and account holders and folds education into the product experience can make a key difference in levels of account participation, ultimately driving higher levels of HSA deposits.  

## Partner with a forward-thinking HSA provider for success

Lively’s HSA is a best-in-class product that was built specifically with both employers and account holders in mind. Employers can easily manage and administer their plan from the employer platform, which provides an expressly designed dashboard, task automation, and clear and insightful reporting. Lively takes care of all account onboarding and employee communication, taking much of the administrative load off of business owners, and offers highly responsive, knowledgeable and personal customer service accessible via phone, email, and chat so issues are resolved immediately. 

When a financial institution leverages [Lively's HSA partner solution](https://engage.livelyme.com/fi-contact-us), they're not solely responsible for sales, administration or service. Lively’s technology seamlessly manages account set-up, administration, record keeping and service. In addition, Lively's sales enablement and customer success team help financial institutions efficiently grow and retain commercial HSA customers.

By offering a competitive product that meets the diverse needs which are currently top-of-mind for your commercial customers (and their customers, i.e. their employees), financial institutions can attract more high quality commercial customers, boost retention, and increase their revenue. An HSA product enables you to deepen a current relationship or initiate a new one, and cross sell other products to them and their employees in the future. 

If you'd like to learn more about how we can help offer a modern HSA and gain and retain commercial customers, [reach out to us today](https://engage.livelyme.com/fi-contact-us).


Why HSAs are a Powerful Tool for Financial Institutions to Gain and Retain Commercial Customers

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Employee Benefits Pulse Check | Lively

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Benefits and the Great Resignation

The wrong HSA can make the lives of your clients and employees unnecessarily complicated. Learn about how Lively’s innovative technology and unparalleled customer service can help you.

HSAs Without the Headaches: Get the right HSA for your clients and employees | Lively

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Invest in your employees during open enrollment and beyond

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Download Lively’s Employee Benefits Pulse Check report and learn about what HR leaders and benefits brokers and consultants must do to attract and retain employees and grow their business. 

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2021 HSA Spend Report

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Open Enrollment Survival Guide

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Lively’s fourth annual HSA Spend Report examines how Lively’s account holders used their HSAs in 2021, and what these spending habits can show us about national healthcare trends.

How HSA account holders spent their healthcare dollars in 2021

Over 70% of HR leaders increased salaries and flexible work arrangements in order to attract and retain employees this year. HSAs are an often misunderstood resource that can benefit both employees and employers.


Invest in your employees during open enrollment and beyond | Lively

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94% of HR leaders say parental leave benefits are the most important to attract and retain employees.

Family and reproductive health benefits are top-of-mind for employees

Americans are not budgeting or savings for mental health care and access to services remains low.

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HSAs are triple tax advantaged: pre-tax savings, tax-free spending on qualified expenses, and tax-free investing

Save on healthcare costs and FICA taxes

Responsive and dedicated support for employees and employers

What to look for in an HSA provider to drive benefits adoption 

How HSA account holders use their HSA dollars, especially on routine expenses versus major emergencies such as hospital visits.


HSA spending habits

Download our 2nd Annual Employee Benefits Survey to personalize your benefits offering (and retain talent) this year

 2021 Wellness & Wealth Report

Download our guide for 5 strategies for increasing the rate of adoption of an HDHP + HSA.

How to Position the HDHP/HSA for Employers

Follow how HSA habits shift as account holders’ healthcare needs change over time and how persona attributes have shifted over the past year.

Predictive persona modeling

84% of HR leaders increased benefits to attract and retain employees.

Companies are increasing salaries and benefits

Learn how the telehealth industry has grown since COVID-19, and forecasts of what’s to come.

Gauge Demand

Download Lively’s Employee Benefits Pulse Check report and learn about what HR leaders and benefits brokers and consultants must do to attract and retain employees and grow their business.

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MEET LIVELY

All the benefits of an HSA without any of the admin headaches

Give your employees the HSA they want, without adding more to your to-do list

A single source of truth for HSA management

Paperless onboarding

Integrated Reporting

Automated alerts

Solutions that meet your needs

Configure in your employer dashboard

Process via secure files

Integrate with third-party platforms

One-time and recurring contributions

Tax-free investment solutions

No fee to offer employees the option to invest

First-dollar investing available for both solutions

Fund with one-time, sweep, or recurring transfers

Conveniently integrated with single sign-on