BASE^® Blog

Health Savings Accounts can be a powerful savings strategy for saving and paying for health care expenses and helping with retirement.  Even though HSAs are beneficial to both employer and employee, so many still do not understand the uses and the advantages to utilizing these health benefits.  Let BASE® show you 4 ways to increase enrollment!

The Health Savings Account (HSA) helps employees, enrolled in a High Deductible Health Plan, save and pay for qualified health care expenses including copays, over-the-counter medications, dental, vision, and much more on a pre-tax basis, making the most of every health care dollar. 

The BASE® HSA is available to businesses of all sizes looking for a low-cost alternative to help keep premiums under control.  It also allows for the opportunity to save for the future, invest funds to build wealth, and to help employees diversify their retirement portfolios. 

BASE® has 4 ways to help increase HSA enrollment: 

1. Spell Out the Savings. Literally, spell out “health savings account” instead of using the acronym “HSA.”  By doing so, it helps to communicate the fact that it is designed for SAVING.  So many still confuse HSAs with FSAs, which are Flexible SPENDING  FSA funds are meant to be spent within the plan year, while HSA funds can be rolled over, year to year, saved all the way into retirement.  Spelling out HSA can show its purpose – to save money – through lower premiums with High Deductible Health Plans, triple tax savings, and the opportunity for investing!  Spell it out to avoid confusion to educate employees and increase enrollment. 
2. Communicate, Communicate, Communicate. Keep talking about the benefits of the Health Savings Account all year round, not just during the open enrollment period.  When employers educate their employees on benefits like HSAs, their employees can feel better knowing what it is, how it will work for them, the money they can save, the confidence in enrolling, and can experience a 25% increase in enrollment. 
3. Employer Contributions. Employers can further incentivize employees to open a Health Savings Account by offering to also contribute to their HSA.  According to Devenir’s Midyear HSA Research Report in 2020, employers contributed an average of $673 to their employees’ HSA.  When it comes to contributions, employer contributions make up 59% of the dollars in an employee’s HSA.  Offering a contribution to start an employee’s HSA is a great way to encourage those employees who are on the fence.  With employer contributions being tax deductible, it’s a win-win. 
4. Offer a Benefits Debit Card. When employees pay for their health care expenses with their HSA funds, they are saving 15-25% since their funds are pre-tax.  When an employer offers a Benefits Debit Card, employees can use their HSA funds when they need them, swiping their card at an HSA-eligible location including the doctor’s office, pharmacy, or HSA-eligible online store.  By having a Benefits Debit Card attached to the HSA, it can help make the process of paying for qualifying health care expenses faster and easier. 

When an employer can help their employees understand what the HSA can do for them, communicate, educate, and offer ways to use their HSA to help them save and pay for health care expenses and save for retirement, they will see an increase in enrollment.  Contact BASE® at 888.386.9680 or visit www.BASEonline.com for more information on the BASE® HSA. 

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In January 2020, another Health Reimbursement Arrangement was made available to employers to implement into their businesses.  The Excepted Benefit Health Reimbursement Arrangement (EBHRA) was created due to regulators recognizing that some employers may wish to offer tax-free reimbursements to their employees without regard to whether they are enrolled in their employer-sponsored group health plan.  This new HRA created the opportunity for employees to still offer employees that do not participate in the group health plan tax-free dollars to pay for eligible health care expenses.    

The Excepted Benefit Health Reimbursement Arrangement (EBHRA) allows employers who offer a group health insurance plan, to reimburse employees not enrolled in the group health insurance plan, up to an additional $1,800 for premiums paid towards excepted benefits and out-of-pocket medical expenses.

The BASE® EBHRA is for businesses of all sizes looking to maximize tax benefits while expanding the benefit package available for their employees.  This HRA is for employees who have been offered the employer-sponsored group health plan but is not required to enroll to participate in the EBHRA.  Eligible excepted benefits are COBRA, dental, vision, short-term medical plans, and other qualifying out-of-pocket health care expenses. 

Check out the 3 reasons why an employer would want to offer the EBHRA:

Provides flexibility for both employees and employers.

With the EBHRA, employees can select the benefits they want without having to pay for what they don’t.  Unlike other health benefits, the EBHRA does NOT require employees to be enrolled in the employer-sponsored group health insurance plan nor an individual health insurance plan.  This helps employees choose the combination of health options that works best for them. 

With the EBHRA, employers get to decide what the reimbursement limit is, up to the maximum contribution limit.

Offers potential savings for all.

With the EBHRA, employees can take advantage of the cost savings and additional tax breaks.  The $1,800 available is tax-free and can be used to pay for qualified excepted benefit premiums and out-of-pocket health care expenses. 

With the EBHRA, employers have a predicted and anticipated cost when offering additional health benefits to their employees.  With reimbursements 100% deductible as a business expense for employers, there are no taxes paid on the amounts given to employees and money not used by employees can be returned to the employer instead of being rolled over to the next year. 

Is unlike anything else in the health benefits game.

With the EBHRA, employees can pay for excepted benefit premiums and qualified out-of-pocket expenses.

With the EBHRA, employers of any size can offer this health benefit and can be combined with other health benefit plans to maximize tax savings. 

The EBHRA requires a group health plan to be offered, so it works well alongside the Integrated HRA or QSEHRA, offering more resources for employees and valuable tax savings for employers.  This benefit is just another health benefit that will help maximize savings and help with recruiting and retaining talent.  For more information contact BASE® at 888.386.9680 or visit www.BASEonline.com. 

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