Supporting employee well-being: the power of health savings accounts
Experiences from the pandemic are challenging people of all ages to rethink their relationship with work. With employees re-evaluating what they want for their careers, including how and where they work, for whom they work and why, employers are being challenged to adapt and evolve how they can support and engage their workforce.
Take, for example, the fact that workers worldwide have come to look to their employers for support with work/life balance, mental health & well-being related needs. 1 And perhaps not surprisingly – after salary, workers globally see bonus (32%), workplace retirement savings plan (30%), and paid time off (29%) as the most important parts of a benefits and compensation package, along with workplace flexibility (27%), and private health insurance (25%). 2
Yet nearly half (43%) of benefits leaders surveyed said that health care costs are making it difficult to offer competitive health care plans that help recruit and retain employees. 3 With rising health care costs and limited budgets, employers should look for opportunities to maximize the value of their investment. A Health Savings Account (HSA) can be a high-impact benefit to consider alongside an HSA-eligible heath plan. HSAs are also valuable because they can help support the physical, financial, and emotional aspects of employee well-being, as illustrated by recent findings from Fidelity HealthSM Thought Leadership:
- HSAs may provide relief from financial stress, especially in uncertain economic conditions. Nearly two-thirds (63%) of consumers with an HSA who reported having an unexpected health care event in the last two years said they felt prepared when facing the health care costs associated with it, compared to 43% of those without an HSA. 4
- HSAs can help support employees with the increasing costs and complexities of health care. Fidelity research shows that 31% of hardship 401(k) account withdrawals are taken to pay for health care. 5 Furthermore, about 40% of people have not included health care costs in their retirement planning.6 While HSAs are only one piece in the puzzle of paying for health care, they can be a valuable tool to help employees manage current health care costs and plan for the future.
- HSAs can be a powerful recruitment tool for next-gen talent. Consumers under age 45 are more likely than older consumers to take advantage of an HSA offering, and they’re more likely to say that an employer’s HSA contribution is a factor in whether to take a new job. 3,4
At the end of Q2 2023, the average account balance for workplace HSAs for which Fidelity provides recordkeeping services rose to over $6,000, with an 80% contribution rate and a 17% investing rate among account holders.7 According to Devenir, the average funded account balance across the rest of the industry was approximately $3,600, with only 8% of HSA accounts invested.8
Read the full 2023 HSA Key Insights report from Fidelity HealthSM Solutions Thought Leadership here. You can also contact your Managing Director to take advantage of in-depth HSA insights and reporting for your organization's employee population, or to learn more about Fidelity's HSA services.