More employers are using automatic enrollment into health savings accounts as part of an effort to position the accounts more as savings vehicles than spending vehicles, according to a survey from Plan Sponsor Council of America.
Of the 463 employers surveyed from June through August that offer HSAs, 41.5% automatically enroll employees in the HSA if they have enrolled in a high-deductible health-care plan, up from 35.3% in 2020 and 32.2% in 2019.
Automatic enrollment "dramatically increases" the savings rate, according to a news release Wednesday. Also, 61.9% of surveyed employers said they educate and encourage rollovers from other health savings account, and 57.2% of respondents allow rollovers.
Employers are still struggling, however, with adequately educating their employees regarding all the benefits of health savings accounts. According to the survey, 61% of respondents provide education only during open enrollment or when newly hired.
Participants also rarely utilize all the investment options at their disposal, with only 20% of total account holders investing in anything other than money market funds.
"Incorporating HSA education as part of a broader financial wellness program throughout the year with multiple touch points, perhaps alongside your retirement plan education, would go a long way towards reframing HSAs," said Ann Brisk, director of strategic partnerships at HSA Bank, sponsor of the survey, in the news release.
Also, 61% of respondents offer investment options. That number is down from 84.4% that said in the 2021 survey that they offer options. PSCA said the stark drop was due to an increase in small organizations participating in this year's survey that are less likely to offer investments. Among organizations with 5,000 employees or more, 80% offered investment options, while only 44.7% of organizations with fewer than 49 employees offered them.
Among employers that offer investment options, 78.4% require $1,000 or more to be placed in the account before participants can utilize them.
The vast majority of employers — 90% — do not mirror their 401(k) investment option lineups and do not plan to do so, while 3% do not do so but have the goal to do so, and 5% said some funds are the same. Two percent said all funds are the same.
The survey results are available on PSCA's website.