How Well Do Employees Know Their Health Savings Accounts? The Need for Improved HSA Communication and Literacy

Abstract

Health Savings Accounts (HSAs) have been around for two decades, with record funds accruing in accounts year-after-year. Despite this growth, little is known regarding how well consumers know what they can spend their HSA funds on to maximize their accounts’ tax advantages. A survey of HSA savers at a large Midwest organization (n = 732) found that about 1-in-4 employees (29.1%) were unsure or did not know their HSA contributions were not federally taxed. Additionally, employees knew that fewer than half of items asked about (M = 4.71) on a 10-item HSA-eligible quiz could be purchased with HSA funds. Employees had the least awareness that hand sanitizer (22.5%), sunscreen (27.2%), and menstrual care products (33.1%) could be purchased with HSA funds. Knowledge or perceptions did not differ based on employee education level, indicating that HSAs are likely a complicated topic for anyone to fully comprehend. These findings showcase a need to develop more effective communication to help employees better understand the unique benefits HSAs can provide. Additional recommendations for employers are provided.

Keywords

Health Savings Accounts literacy high-deductible health plan

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