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Your Bank > Education and Advice > CNB University

A Health Savings Account, a Positive Addition This Open Enrollment Period

With the rising cost of health care, employers need effective solutions to lower expenses while offering attractive benefit plans to their employees. One alternative to consider is adding an HSA compatible (qualified high-deductible) plan to your health care plan offerings. 

Strategic employee benefits communication is important in assisting employees in making informed health care decisions. A few things to consider regarding your benefits meetings this open enrollment period are:

Start early

Open enrollment season is just around the corner. Employers should start communicating early about health care plan choices, especially when adding an HSA-compatible health plan. Place posters in prominent places to let your employees know about upcoming open enrollment meetings. Consider payroll stuffers and announcements on your company website, for both onsite and webinar sessions.

Allow plenty of time for your meetings

Allow sufficient time to review the summary plan benefit documents, as well as a Q & A session for employees to become familiar with new plans. Ideally, 90 minutes has proven effective. Schedule flexible meeting times, extend the invitation for spouses/partners to participate. Offer refreshments and make the meetings fun.

Transparency

Share the total costs of the benefits being provided. Your employees may be surprised when they realize the commitment you make to their careers and the well-being of their families, rather than simply what their costs are to have these benefits.

Information & Trusted Advisors

Arm your employees with as much information as available. If you have a company intranet, consider creating a tab exclusively featuring the benefits and post as much detail about the various plans being offered as is practical. Provide links to the insurance carrier’s websites for further exploration. Rely on your brokers, agents and partners as a resource for education, FAQ’s and additional support.

Why offer an HSA?

With over 17.4 million people in the U.S.* covered by an HSA eligible health insurance plan, it continues to be an increasingly popular option. HSA compatible plans offer lower premiums coupled with a taxed advantaged, interest bearing savings account. Funds from an HSA are used to pay for qualified medical expenses (tax free) until the deductible is met and unused funds rollover year after year. The account earns interest (tax free) and provides long term benefits for future qualified medical expenses. At the age of 65, you may also use your HSA funds to pay for Medicare premiums or use the money for non-qualified distributions without incurring a 20% penalty.** Today if you are in a 28% tax bracket with an HSA, you are actually paying only $7.20 for every $10.00 of medical expenses you incur.

Is an HSA better than an FSA?

Absolutely! While an FSA allows employees to set aside tax free dollars to pay for medical expenses, they need to predict what those expenses will be for the current year. Additionally, in 2016 the maximum contribution will remain capped at $2,550. Also, the FSA is not an interest-bearing account, allows a maximum rollover of $500*** from year to year and is not portable to other employment or after insurance changes.

Having an HSA-compatible health plan option, in addition to a traditional (co-pay) plan, gives employees an opportunity to save money! When an employer makes contributions to an HSA, employee adoption rates are greater, saving even more in premiums, with the full contribution going into the HSA account. Plus the employer does not pay FICA taxes on contributions while the employee receives the contribution tax free.

Canandaigua National Bank & Trust and leading HSA provider, HSA Bank, have teamed up to bring Health Savings Accounts to our consumers and businesses. By drawing upon HSA Bank’s servicing expertise and the convenient option to make deposits and withdrawals at our CNB Bank Offices, we offer a valuable solution to our customers.

HSA Bank is a national leader in HSA administration and recognized in the industry for providing superior customer service. Our partnership allows us to leverage the expertise of HSA Bank and continue to provide you with the exceptional customer experience that you have come to expect from CNB.

If you are interested in knowing more about Health Savings Accounts, please don’t hesitate to contact us at (585) 394-4260.

*AHIP 2014 Census https://www.ahip.org/2014/HSA-Census-Report/
** Non-qualified distributions are subject to tax.
***FSA carryover available when selected by employer plan

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