Encourage clients to take advantage of HSAs

  • Share:
  • Facebook
  • Twitter
  • Print
  • Email
  • Text Size

dental-benefitsAs awareness and demand of healthcare spending accounts in the small business market increase, advisors are presented with the opportunity to help employers make their benefits plans more meaningful to employees, which can increase employee retention rates and give employers more for their money.  

For example, setting up the plan structure so the funding criteria is based on years of service to reward longevity, or using 3% of earnings to determine funding amounts are just a couple of ways these plans are being configured, says Robert Crowder, president of The Benefits Trust. “Employers are looking to work with their employees and keep them motivated. Employers are using healthcare spending accounts in creative ways to motivate existing employees,” he says.

Healthcare spending accounts are also an easy way for employers to offer benefits for the first time, says Lucy van Scheltinga, a benefits consultant with Benecaid Health Benefits Solutions. She says those that do put one in place generally graduate to a more traditional plan to help round out the coverage. For example, implementing a drug plan and pairing it with a healthcare spending account to cover dental or vision care.

Or course, determining if a healthcare spending account is right for a specific employer depends on a number of things: their philosophy on benefits, workforce demographic, budget, and overall exposure to the employer all need to be considered.

Van Scheltinga says the most common question she gets from advisors is what is a reasonable amount to offer. Again, while all the above determining factors need to be weighed, she says in her experience most healthcare spending accounts are for amounts between $3,500 and $5,000.

Glenn Kehrer, employee benefit consultant with Group Benefits Consulting of Canada Inc., adds, “You don’t usually have 100% penetration on a healthcare spending account. From what I’ve seen, the higher the dollar maximum is the less people seem to use [it].”

What it all boils down to is added flexibility for benefits and more control over costs. “It’s not either or, as we thought a few years ago,” says Crowder. “It’s part of a benefits plan and hybrid plans are becoming more popular.”

Transcontinental Media G.P.