Employers readily admit that changing the way workers think about and use their HSAs isn't easy. It's a challenge to get people to understand that they can pay for today's health expenses with money other than what's in their HSA "so that they can let the HSA grow," said Kelli Send, the Brookfield, Wis.-based leader of the employee education and advisory services division at consultant Francis Investment Counsel LLC. "It is a brand new horizon for these people because they never thought of it that way," she said.
Ms. Send has seen a strong uptick in the number of plan sponsors looking for assistance in choosing HSA providers for their workforces. Not all HSA providers offer investment accounts, which for many employers is a deal breaker, according to Ms. Send. Employers prefer providers that offer a mutual fund platform, she said.
"Why would you want to limit your employee choices on an HSA provider to just those offering money market funds?" Ms. Send asked.
Ms. Send said employers want to make sure the fund selection offered by HSA providers is adequate, even though they are under no fiduciary obligation.
Plan sponsors that offer an HSA need to know that they shouldn't just pick the local bank they happen to do business with, she said. "Even though it's not a fiduciary act to do right by their participants, it is our view that they do a search process just like they would an RFP for a 401(k) provider."
While sponsors are not responsible for HSA fund selection and monitoring as they are with their 401(k)s, that might change in time as HSAs become more popular, Ms. Send said.
Fees, too, are not generally monitored in HSAs. Because the balances in them are relatively small, HSA fees are higher than 401(k) fees, industry observers said. "Since an HSA is not an ERISA account, there is maybe a little less scrutiny over the fees than what you might see in a 401(k)," said Rob Austin, the Charlotte, N.C.-based head of research at Alight Solutions.
Plan sponsors brushed off criticism that high-deductible plans force employees to shoulder a greater health-care burden due to the higher deductibles they must meet before their insurance kicks in. Many argued that the lower premiums coupled with HSA employer contributions make high-deductible health plans the more cost-effective choice for many employees, especially after factoring in the tax advantages of an HSA.
"I do think you need to look at it as a total picture," Mr. Austin said, adding that plan sponsors are "forthright in sharing modeling tools."
Others argued that high-deductible plans make employees savvier consumers of health-care services, thus reducing their own personal health-care costs.
"Under a more traditional health plan, a lot of times the health plan participants don't have any sense for what things cost," Foth's Ms. Gear said, explaining that they might not request generics or shop around for better pricing.
"They are absolutely asking better questions and shopping for health care in the same way you might shop for other high-cost items," she said.