Empower employees with HSAs and retirement benefits
With increasing numbers of employees looking to their employers to help support them on their financial journey, it’s essential for benefits brokers to leverage this opportunity to enhance the value they provide.
Financial wellness is not just a personal issue; it has far-reaching implications for organizational health. Financial stress can impact employee productivity, job satisfaction, and overall wellbeing. By proactively addressing financial wellness, organizations can foster a more engaged and motivated workforce. Brokers looking to guide organizations in improving employee financial wellness can focus on health savings accounts (HSAs) and retirement benefits, which offer two dynamic entry points. These benefits can serve as foundational tools for employees on their financial wellness journey.
First and foremost, brokers can advise their clients to emphasize why financial wellness is important — and why health benefits are not completely separate from retirement benefits. A clear understanding of the long-term benefits can motivate employees to take actionable steps toward improving their financial situation. Some of those benefits of HSAs include:
Triple tax advantage:
- Tax-deductible contributions: Contributions to an HSA are tax-deductible, reducing taxable income.
- Tax-free growth: Funds in an HSA grow tax-free
- Tax-free withdrawals: Withdrawals for qualified medical expenses are tax-free, which can offer tax savings over time.
Retirement savings:
- After age 65, individuals can withdraw HSA funds for non-medical expenses without penalty.
- HSAs can be a flexible tool for retirement planning, which could supplement other retirement accounts like 401(k)s.
- Having an HSA to cover medical expenses can provide financial security because they can be used for a wide range of medical expenses, including Medicare premiums in retirement.
Growth potential: Many HSA accounts offer investment options once a certain balance is reached. By investing HSA funds, accountholders can potentially grow savings over time.
With this type of information, brokers can help HR teams communicate with their team members. But they should remind their clients that, too often, employees do not understand their benefits like HSAs and retirement options, and, most importantly, how to best use them. When sharing information about benefits, brokers and employers should use language that meets employees where they are, avoiding jargon and utilizing clear and simple words and syntax.
Some communications strategies can include:
- Benefits summaries: Develop clear and concise summaries of HSAs and available retirement benefits, highlighting key features, advantages, and how they can enhance financial stability.
- FAQs: Address common questions and concerns related to these benefits, making it easier for employees to understand and utilize these resources.
- Step-by-step guides: These should be short and simple. They can include: how to enroll in HSAs and the retirement plan(s) including deadlines and necessary forms; tips about how to maximize the benefits (e.g. contribution limits or using employer matching contributions for a retirement plan); and reminders to review and adjust financial strategies to stay on track with financial goals.
To ensure that financial wellness information resonates with employees, it’s important to use a variety of communication formats and languages to effectively reach and engage an increasingly diverse workforce. These methods can include:
- Text messages: Short, actionable tips and reminders about financial wellness and benefit-specific deadlines.
- Emails: Short, detailed explanations and updates on financial benefits and resources. Outreach via email should be strategic given how many emails employees receive every day.
- Short videos: Engaging, visual content that explains complex concepts in an easy-to-understand format.
- Interactive content: Tools like calculators or decision-making aids that allow employees to see how different choices impact their financial wellness.
Benefits brokers can play a key role in helping organizations implement these strategies effectively. By partnering with HR teams, brokers can ensure that the financial wellness initiatives are not only well-planned but also executed in a way that maximizes employee engagement. Regularly assessing the effectiveness of these initiatives through employee feedback and participation metrics can also help refine and enhance the approach. This iterative process ensures that financial wellness programs remain relevant and impactful.
National Financial Awareness Day presents a timely opportunity each year for organizations to prioritize and promote financial wellness among their employees. By focusing on HSAs and retirement benefits, and by employing clear communication strategies and educational resources, brokers can significantly contribute to their clients’ success. It’s also a great time to help employees celebrate small financial victories, whether it’s paying off a credit card, sticking to a budget for a month, or making an extra contribution to a retirement fund. Encouraging employees to share these wins can create a positive, supportive culture around financial wellness. This not only helps employees achieve greater financial stability but also fosters a more engaged and productive workforce.
Becky Seefeldt is Vice President of Strategy for Inspira Financial.