Employer contributions to a Health Savings Account is a useful way to encourage employees to enroll in a High Deductible Health Plan (HDHP) with an HSA.  If your organization is considering offering an HSA with an employer contribution, it is important that you consider if your benefits administration technology can accommodate the intended contribution strategy.  Exploring the opportunities within your Ben Admin will inform how your organization will handle contributions for new hires, qualifying life events, and annual renewal enrollments.

BTR has vast experience with employer contribution strategies that work well with Ben Admin technology – here are a few strategies that have proven to be successful.

• Per Pay Contributions – This is typically the easiest strategy and reduces concerns with pro-rating employer contributions for new hires during the year.
• Monthly/Quarterly Employer Contributions – This strategy is ideal for HSA changes that are effective on the 1st of the month/quarter. Typically, the employee receives the employer contribution on the effective date occurring after the enrollment is completed. BTR recommends verifying that the ben admin system will support this strategy, since it is likely a different schedule than employees’ payroll schedules.
• One-Time Annual Contributions – This strategy works great at Annual Enrollment because it funds employees’ HSA accounts “up front” at the beginning of the plan year. However, it will be important to consider how your technology will pro-rate employer contributions for new hires and any mid-year adjustments.
• Employer-Match Per Pay Contributions – Typically, with this strategy, the employer matches a certain percentage of the employee contribution, up to a maximum amount. Not all systems can handle a per-pay employer match strategy, so it is recommended that employers check with the Ben Admin service team before implementing this strategy.
• Tier-based Contributions – An example of this strategy could include a $1,200 annual employer contribution for single HDHP coverage and a $2,400 annual employer contribution for family HDHP coverage. In this scenario, employers will want to consider how to handle the funding mechanisms (monthly vs. annually) for employees who have a life event during the year which could result in moving HDHP tiers.
• Wellness-based Contributions – This strategy entices employees to participate in wellness endeavors in order to earn employer contributions to their HSA. This is usually based on external factors, such as tobacco status or fitness event participation, so employers should verify that the ben admin technology can manage these factors in order to successfully execute employer contributions.

Employers looking to offer an employer-funded HSA plan should connect with the Ben Admin technology service team, as well as any other impacted systems, to determine if and how the technology will support the strategy. The goal of technology should be to avoid manual workarounds and costly mistakes. BTR is available to support these considerations as well as advise on technology recommendations for HSA Employer Contribution strategies.

If you would like more information, let us know! Email BTRProjects@bentechre.com to connect with our experts.

About the Author

Kristina Chavez supports BTR as the Business Development Manager, focusing on new opportunities and business development for the BTR Extend division. Kristina enjoys working directly with employers, as well as benefit advisors, to strategize on their technology needs around employee benefits.