Fidelity Investments, without citing which large clients it has landed over the past year for its brand-new health savings account (HSA) benefits program, issued a report stressing the importance of making HSA enrollment an ongoing and personal experience.
Health savings accounts permit workers to set aside money they will need above and beyond health insurance to cover medical costs (see "Health Savings Accounts Poised for Growth," MME 2/21/05). HSAs are also useful for those people preparing for long-term care costs in retirement, which, according to Fidelity estimates, runs about $190,000 for an average couple retiring today at age 65.
With the 401(k) market virtually saturated, except among smaller companies, fund and operations executives have also begun embracing HSAs as a new way of infusing assets into a crowded playing field.
The three main areas that Fidelity identifies as "keys to a successful HSA rollout" are: 1) Making sweeping changes to all health plan designs and requiring an "active" benefits enrollment, 2) Communicating plan adjustments early and in stages, and 3) As with any other type of retirement saving account, providing education support and cost calculators that help employees understand the impact of plan changes on a personal level.
"Rolling out an HSA is a good way for employers to introduce employees to the broader concept of personal accountability for health benefits decisions," said Marc Hallee, senior vice president of health and welfare consulting for Fidelity Human Resources Services. "It empowers employees to better control health care expenses now, while also encouraging them to save for long-term health costs in retirement."
Of a number of additional pointers from Fidelity, one is to provide some level of employer contribution, which, studies show, works to improve enrollment in and contributions to 401(k)s and other types of defined contribution savings plans. In addition, Fidelity recommends that healthcare and human resource benefits managers "model designs to determine impact on various groups of employees."