HSAs and cancer care: How to guide your employees

Coming up faster than I can believe is June and the start of summer. June is also National Cancer Survivor Month and it is important during this time that as employers, we take a minute to think about how we are supporting our employees before, during and after a cancer diagnosis.

Treating serious conditions such as cancer can represent a significant current and future cost challenge for those stricken by this disease. When thinking about paying for healthcare needs during and after treatment for such a serious condition as cancer, most people would think that a traditional health plan such as a Preferred Provider Organization (PPO) or a Health Maintenance Organization (HMO) would offer a better option than a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA). However, an HSA-centric plan can be a powerful option to support employees in many different circumstances, including those faced with a serious affliction such as a cancer diagnosis.

Because the cost exposures from deductibles, co-pays, co-insurance and out-of-pocket maximums on traditional plans have risen so much in the past decade, today they may actually represent the same or even higher total cost exposures than an HSA-qualified plan. Given the relative parity in total costs and the unique attributes that HSAs offer to save and pay for healthcare costs now and in the future, an HDHP with an HSA may actually be a better alternative for employees—even those with serious medical ailments such as cancer.

To help employees understand their different plan options and to put them in the best position to address their healthcare needs, employers need to help employees understand these different attributes. By focusing on decision support, strong health benefit communications and implementing a matching contribution strategy, employers can help their employees make the most of their benefits to save now and for future medical costs.

More about HSAs

HSAs are designed to help individuals save for long-term healthcare needs through investment options and help to pay any healthcare costs in the present, all while offering a triple tax break. Contributions are tax-deductible, or pretax if made through payroll deduction, money grows tax-deferred, and withdrawals are used to pay medical expenses are tax-free. HSAs also stay with the employee whether they change jobs, need to take an extended leave of absence, or retire. The money that is not used rolls over from year to year, and after age 65, can be used for any purpose without penalty–only income tax is assessed if used for non-health related expenses.

According to data from the annual HSA Bank Health & Wealth Index, we have seen that individuals actually have higher rates of engagement with their healthcare, including preventative care and screenings when enrolled in a HDHP. In 2021, consumers with HDHPs had engagement scores nearly 10% higher than those with a traditional PPO and those with access to an HSA were 17% more likely than those with a PPO to frequently or occasionally save money for future healthcare expenses.

Decision support and ongoing education

An HDHP with HSA might not be appropriate for all your employees, however. That is where employers can help. Decision support tools, such as comparison tools, can help individuals “do the math” to decide what health plan is right for their needs from a total cost perspective, whether it is a HDHP with an HSA, a PPO or a HMO. Guiding your employees by providing insights that increase understanding as well as the tools or products to enact and drive healthcare decisions will empower employees through overall health and financial decision making and ensure they understand their insurance benefits.

On top of decision support, employers should have strong, year-long communication around the healthcare and benefits they offer to employees (not just during open enrollment). When it comes to cancer screenings, many employees may not understand the difference between preventive care and other medical care and what preventive services might be covered by their plan. According to data from the annual HSA Bank Health & Wealth Index℠, there is a continued lack of understanding and engagement with their health plans across American. For example, only 11% Generation Z consumers reported they knew what their health plan deductible was, and overall knowledge of out-of-pocket maximums was found to be low at only 22%.

Educating individuals on their plan options and healthcare costs is key so they can make smart healthcare decisions and know how much to save for future medical expenses. It is especially important to ensure employees understand that many preventive services and cancer screenings are currently required to be exempt from deductibles and that critical illness coverage, and similar add-ons, does not typically invalidate HSA contribution ability.

Offering incentives and/or matching contributions

Employers can help by offering incentives for their employees to engage with their health before being sick. This can be done on a wellness basis, for example, by offering an incentive of $100 for an employee’s HSA for having an annual wellness appointment. Additionally, employers can set up a matching contribution, as many do with 401(k) retirement plans, using formulas like common 401(k) matches.

Employer contributions tend to heighten employees’ engagement with their accounts and enhance the perceived value of their healthcare benefits. This can be especially empowering for lower income employees, and we are seeing more employers consider making income-based contributions that favor lower paid employees who may need extra help paying healthcare costs under an HDHP.

Employers’ role

While an HDHP with an HSA might not be appropriate for all employees, our role as employers needs to continue to help make healthcare more accessible and understandable.

We can do this by:

• Offering decision support tools;
• Having increased and open communication year-round (not just during open enrollment); and
• Offering an incentive and/or matching HSA contribution strategy.
• Enacting even small changes can help drive engagement among employees and mitigate the
• impact on care access, especially for cancer patients and cancer survivors.

Kevin Robertson is Chief Revenue Officer at HSA Bank.