One of the best ways to talk to your employees about how they can save money on healthcare expenses is to pose a hypothetical situation like the following:

Ask them to think about the last time they purchased a car. Did they go to any random dealership and purchase the first car they saw? While it is possible that some people purchase cars that way, the much savvier approach is for consumers to list the needs they have when it comes to a car, research the best prices and places to buy, then go to the dealership and purchase the car. This approach allows them to save money while still getting the best car that fits their needs.

Now, take the hypothetical situation and compare it to healthcare. While choosing healthcare options may not be as simple as purchasing a car, consumers (i.e. your employees) have more options than they might think when it comes to deciding how they spend their healthcare funds — especially if they have a health savings account (HSA).   

For employers, there has been a monumental shift in the healthcare marketplace from higher cost, traditional plans to high deductible or consumer directed health plans (CDHP). Between 2007 and 2018, CDHP adoption has increased 264%. CDHPs and health savings accounts (HSAs) allow employers to save on premium costs and taxes while empowering employees to become more educated and involved in their healthcare decision making.

As these plans continue to grow in popularity, adoption and implementation, it’s important for employers to properly position CDHPs and HSAs with employees. With so much misinformation around, employees may be confused and apprehensive about enrolling in these types of plans. Here are a few ways to help your employees embrace consumer directed health plans.

The IRS announced last year that health savings account (HSA) contribution limits have increased for 2019, giving you and your employees the chance to save more than ever.

As a response to rising inflation, the contribution limits into savings vehicles like IRAs, 401(k)s, and HSAs can rise from year to year. And given the fantastic triple tax advantages¹ that an HSA offers, 2019 is the year to encourage your employees to contribute the full amount to their HSAs.

It’s official. The IRS has just announced that for 2019, individuals can contribute $2,700 to their FSA. That is an increase from the 2018 limit of $2,650. The FSA increase also applies to limited-purpose FSAs (LPFSA) that is limited to vision and dental services, which can be used in cooperation with a health savings account (HSA).

An FSA empowers employees to pay for qualified medical expenses with pre-tax funds. FSAs are popular accounts because of the tax benefits they provide to employees and to their employers.

In a previous post we revealed some fees that may be lurking in an HSA. In this post we’ll go a step beyond and explore what fees reveal about your HSA provider and their motivations.

Michael Kitces, director of financial planning at Pinnacle Advisory Group Inc. stated in a recent Wall Street Journal article, that HSAs are, “..the most tax-preferred account available. Using one to save for retirement medical expenses is a better strategy than using retirement accounts.”