HSA Employer Contribution
For those who offer an employer contribution for HSA's: do you require employees to contribute to their HSA in order to receive the employer contribution? Either way, do you factor in the cost of the employer contribution into the total amount spent per employee across plan types (if applicable).
Any information you are able to provide on the above is greatly appreciated!
Good Morning Kerry! This is a great question. We serve over 400 clients and many of them have their own contribution strategy. It is whatever makes the most sense to the organization.
There are organizations who are in the market for attraction and retention and may contribute to the HSA without a match. Another popular option is for those coming onto the plan for the first time, offering a bonus HSA contribution and then moving to a match after that point. There really are endless options for you, it comes down to organizational goals and cost analysis.
We run a full cost analysis for our clients to show the changes to your current HSA model and what it means to the organization. Would love to help you with that if considering changing.
If you have any further questions, please feel free to reach out to me directly, firstname.lastname@example.org or 513-699-2986. Thanks!
Ryan is spot on below about how every employer designs a strategy that makes the best sense for them,-usually with a broker's help to determine how it affects your overall health spend.
My company did initially consider your scenario above, but in the end, we decided to tie the contribution to our Wellness Initiative. We offer two High Deductible Health Plans, and depending on which you choose, the level of employer contribution is affected. If the employee participates in the wellness plan, we provide a chunk of the contribution upfront to pad employee accounts a little. The rest of it is then paid through equal installments the rest of the year through their pay. If the employee decided not to engage with our wellness plan, then they don't get any of the employer funds.
And yes, when we look at our total health spend, we included that contribution into those figures-both at the macro level and at the per employee level.
Don't hesitate to connect if you want to discuss. email@example.com 937-234-4247. Happy New Year! Anna
Great question. There can be some creativity in designing your HSA contributions, but I would caution you to ensure they are fully compliant and not discriminatory. Our ERISA attorneys have confirmed that it could be deemed discriminatory to limit employer HRA contributions to only those who are making contributions. We advise our clients to treat all employees the same with making employer contributions, with the exception of those who are ineligible (e.g,. Medicare participants).
Feel free to call me at 513-703-8837 if you want to discuss further.