Consumers missing HSA investment opportunity
Employees using HSAs as specialized checking accounts
According to a study from the Employee Benefit Research Institute, the vast majority of Health Savings Account holders are not taking advantage of the investment potential of their accounts.
The study reported that most account holders use their HSAs as “specialized checking accounts,” using the funds to cover deductibles, coinsurance and copayments. But they aren’t taking advantage of the investment opportunity of HSAs, nor are they maximizing their contributions.
The report found that just 4 percent of account holders invested their HSA balance, and the average total contribution in 2016 was $2,922, less than one half of the allowable maximum for family coverage.
While using HSAs for healthcare expenses is valuable, maximizing contributions and investing funds can be the most effective way to benefit from the accounts.
BerniePortal integrates with HSA Bank, making it easy for your clients to offer HSA-eligible plans. BerniePortal also streamlines defined contributions, allowing employers to contribute directly to employees’ HSA accounts.
Here are two other tips to share with your clients to help employees maximize their HSAs.
Contribute as much as you can
HSA funds roll over every year, so there’s no reason for employees not to contribute as much as they can. In the event that employees do have an expensive healthcare event, they will have a savings account to fall back on. Unused funds also function as a retirement account. If employees withdraw them after age 65, you pay only income taxes.
Open at a bank with investing options
Banks that are linked with brokerages give employees the ability to invest additional funds. For example, HSA Bank has a partnership with TD Ameritrade, through which employees can invest in mutual funds or in a range of securities.
Brokers—BerniePortal makes it easy for employers to maximize HSA-eligible plans. Learn more by booking a demo today.
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