HSA Day: Consider offering an HSA alongside supplemental health benefits

As healthcare costs continue to rise, employees may be looking for more than health coverage alone. Voluntary benefits that can help manage out-of-pocket medical expenses are becoming an important consideration. For employers and brokers, Health Savings Account (HSA) Day offers an opportunity to consider how an HSA and supplemental health benefits may contribute to a more comprehensive benefits offering.

HSAs and supplemental health benefits are separate products that offer value independently. When offered together, they may help employees address different financial needs associated with covered medical events.

The challenge: Healthcare costs are more than medical premiums

Even with health insurance, employees can face significant out-of-pocket expenses when an illness, accident or critical health event occurs. Deductibles, coinsurance, transportation costs, household expenses, and lost income can have a financial impact at the very moment employees should be focused on recovery. At the same time, employees may be unprepared for healthcare expenses today and in retirement.*

Supplemental health benefits and HSAs may help address these concerns in different, complementary ways within a broader benefits strategy.

Understanding the roles of each benefit

Supplemental health insurance coverage — such as accident, critical illness or specified disease, and hospital indemnity insurance — provides a fixed cash benefit when a covered event occurs. Employees can use paid benefits as they choose, including for out-of-pocket medical bills or household expenses. Remember, these limited benefits do not meet the definition of minimum essential coverage under the Affordable Care Act, but the benefits paid may help an insured person minimize the financial impact of a covered event, such as a cancer diagnosis.

An HSA serves a different but complementary purpose. Employees enrolled in an eligible high-deductible health plan can contribute pre-tax dollars to an HSA through payroll deductions and use those funds for qualified healthcare expenses. Contributions remain in the account until used, and the account can be taken with the employee if they leave their employer.

Together, these separate products may help employees address two distinct financial needs:

• Minimizing the financial impact of covered health events
• Offering a strategy for saving and preparing for future healthcare expenses

How offering these two products can help

1. Offers options that may help with immediate and long-term out-of-pocket costs

   Supplemental health benefits pay a benefit that can help lessen the financial impact of a covered event, such as an illness. An HSA, meanwhile, can help employees set aside funds for current and future qualified healthcare expenses.

   Rather than positioning one benefit as a substitute for the other, employers can present both as options that may give employees more flexibility as they prepare for and pay healthcare-related expenses.

2. Supports financial wellness beyond the doctor’s office

   Healthcare costs are often a meaningful financial concern for many employees. By offering supplemental health benefits alongside an HSA and an eligible HDHP, employers can provide multiple options for employees to consider as they manage the short-term financial impact of covered events and save for future qualified healthcare expenses.

   This approach may offer employees a way to align healthcare benefits with their broader financial wellness goals.

3. Highlights opportunities offered by a high-deductible health plan

   Employers increasingly use high-deductible health plans (HDHPs) to help manage healthcare costs, while some employees may hesitate to enroll because of concerns about deductibles and out-of-pocket exposure.

   Offering an HSA alongside supplemental health benefits may help address those concerns. An HSA provides a tax-advantaged way to save for eligible out-of-pocket medical expenses, while supplemental health benefits may help lessen the financial impact of a covered event.

4. Creates a more compelling benefits story

   For brokers, discussing these products together may support a broader, more consultative conversation with clients.

   Rather than discussing benefits in isolation, brokers can help employers understand how separate solutions may complement one another in supporting workforce financial wellness and benefits engagement.

Employers gain:

• A broader benefits offering
• Support for workforce financial wellness
• Potentially stronger HDHP enrollment outcomes

Employees gain:

• Support for covered health events
• Tax-advantaged healthcare savings opportunities
• A clearer understanding of how different benefits support different needs

Moving from protection to preparation

Effective benefits strategies don’t just help employees respond to certain healthcare events, they help employees prepare for future qualified healthcare expenses.

Supplemental health benefits can provide protection when a covered event happens. An HSA can help employees build a source of funds for qualified healthcare expenses today and in the future. Offered together in a benefits plan, they may help employees remain prepared and resilient. 

Why Voya?

Voya’s carrier-agnostic HSA solution can fit alongside an employer’s existing HDHP health plan and complement a broader benefits strategy. It can help eligible employees save tax-advantaged dollars for qualified healthcare expenses today and prepare for eligible medical expenses in retirement. When offered alongside supplemental health insurance, these separate solutions offer employees more ways to plan for healthcare costs and manage the potential financial impact of covered events.

Learn more about how Voya’s HSA solution may complement your benefits strategy and support your workforce’s healthcare savings needs:

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*While an accountholder is enrolled in an HDHP, the accountholder can contribute to an HSA. Funds in an HSA remain available if they are in the account, regardless of HDHP enrollment. After age 65 or enrollment in Medicare, an accountholder will no longer be able to contribute to an HSA, but will be able to continue to use any funds in the HSA for eligible expenses. After age 65, an accountholder may also use HSA funds for non-eligible expenses; however, those amounts will be taxed as ordinary income.