“Preserving the Harvest” by Leveraging Health Savings Accounts

Jack Towarnicky of aequum health joined Humaculture’s Steve Cyboran, Wes Rogers and Kelley Long on Thursday, February 17, to present the second installment of the Hidden Opportunities, Strategic Compliance series. They clarified why “unexpected” bills do not always mean “surprise” bills and demonstrated how Health Savings Accounts (HSAs) can be a strategic response to the No Surprises Act (NSA).

A recording of this webinar, Preserving the Harvest…Leveraging HSAs, can be viewed here.

According to Towarnicky, many workers today are “financially fragile” – unprepared for everyday expenses, let alone out-of-pocket medical expenses. Most workers have no savings earmarked for regular cost sharing – copayments, deductibles, coinsurance, etc. So, even though we now have the NSA in place to protect patients from “surprise” bills, out-of-pocket medical expenses remain an unexpected and unplanned financial burden for many Americans.

Health Savings Account Strategy
What can plan sponsors do to help alleviate “financial fragility” when it comes to the medical expenses participants are not prepared to pay? Done right, an HSA strategy will prepare participants for out-of-pocket cost-sharing (deductibles, copayments, coinsurance).

HSAs have evolved to become part of a “health and wealth” rewards strategy. Capable of “Quadruple Duty” – HSAs can cover out of pocket medical costs in current and future years and Medicare premiums, while also providing for retirement income and survivor benefits. HSA assets receive America’s most valuable benefits tax preference – contributions are pre-tax for federal income tax purposes, same for most state income taxes, as well as FICA (Social Security) and FICA-MED (Medicare). Earnings accumulate tax deferred and payouts for eligible medical expenses are tax free. More medical expenses qualify under HSAs than under health Flexible Spending Accounts (FSAs). Unlike FSA accounts, there is no “use or lose” or forfeiture provisions. Unspent money rolls over from year to year.

Because most employers do not offer HSA-capable coverage, adding this option can create a competitive advantage for both the employer and participants.

The strategic response takeaway from this session is using an HSA strategy.

  • Use tax preferences to finance what cannot or should not be avoided
  • HSA tax preferences lower both employer and employee costs
  • HSA savings ensure associates are prepared for the “unexpected” and the “surprises”
  • This is an opportunity to take advantage of NSA compliance by also responding strategically – adding to or replacing existing coverage with HSA-capable coverage
  • Because most workers do not have access to HSA-capable coverage today, adding or enhancing HSAs can be a differentiator – helping to attract & retain desired talent by leveraging self-selection

Join Jack and others for the last two sessions in the five-part series. Next up is Hidden Opportunities: Mental Health Parity – A Lucid Approach, Thursday, April 21st, at 1PM Eastern.