Health savings accounts (HSAs) have experienced a remarkable surge in popularity, emerging as an essential tool for managing health care costs. An HSA is a savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. This recent growth is a result of employers actively advocating for HSAs and embracing automatic enrollment.
Automatic Enrollment: A Rising Trend
According to the Plan Sponsor Council of America’s (PSCA) 5th annual HSA survey, 46.7% of employers automatically enroll eligible employees into HSAs. This marks a significant increase of over 30% in just two years. Simultaneously, strategies utilizing default or suggested savings rates to encourage higher funding have also gained traction, showcasing employers’ proactive stance in supporting financial health. In this way, employers are proactive in addressing the challenge many employees face when trying to open an HSA after enrolling in a qualifying health plan. Such enrollments ensure employees gain access to these contributions, maximizing the benefits of HSAs and fostering financial security.
Triple-Tax-Advantaged Appeal
Savings through HSAs are triple-tax-advantaged, which continues to entice individuals. Contributions made pre-tax, tax-free growth of funds, and tax-free withdrawals for qualified medical expenses underscore their financial appeal. In addition, HSAs offer financial benefits and promote proactive health care decisions and preventive care.
Addressing Escalating Health Care Costs
The surge in automatic HSA enrollment reflects employers’ recognition of the relentless escalation in health care costs. Employers understand the pivotal role HSAs play in enhancing health, reducing costs, and securing future wealth for employees amid mounting health care expenses.
HSAs In A Holistic Approach
Employers’ growing support for HSAs aligns with broader positive trends, including increased employee contributions and integrating HSAs into holistic retirement savings approaches. This signifies a paradigm shift in how individuals prepare for and manage health care expenses, with automatic enrollment paving the way for a future where HSAs play a pivotal role in financial well-being.
Group Health Coverage Through A PEO
When navigating the evolving landscape of health care finance and embracing the shift towards HSAs and automatic enrollment, partnering with a professional employer organization (PEO) is a game changer. If you know what a PEO is, you understand that they streamline HR processes such as payroll, hiring and recruiting, and more. However, you may not have known that PEOs provide business owners access to comprehensive benefits packages that resonate with employees’ needs and desires. By collaborating with a PEO like GMS, business owners can ensure their workforce gains access to HSAs and other benefits plans, maximizing the advantages of these plans. Through tailored guidance, support, and an array of benefits options, GMS empowers businesses to enhance their offerings, fostering satisfaction and financial security. To learn more about our benefits offerings, contact us today.