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- Majority expect guidance from a financial advisor
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New research from the
Yet, just one in five (20 percent) business owners fully understand important elements of health savings accounts (HSAs), according to the survey of 406 U.S. business owners with 11-500 employees.
Among those surveyed, many didn't understand that it's necessary to provide a high-deductible health plan (HDHP) when offering an HSA, that employers can contribute to employee plans and HSA balances carry over year-to-year. These findings demonstrate the misconceptions and barriers that exist in helping employees save for current or future healthcare expenses.
Meanwhile, three in four
"Business owners want to talk about employee benefit solutions that offer tax savings and can help increase retirement savings," said
Uncertainty may create barriers
Business owners who already offer an HSA report that the main benefits are providing tax advantages (56 percent) and the ability to cover healthcare deductibles and out-of-pocket expenses (58 percent). Less than half (43 percent) say saving for retirement is an advantage associated with HSAs. In contrast, those who don't offer HSAs and are not considering one say they are unsure of the advantages associated with HSAs.
In addition to misconceptions around the benefits of an HSA, a gap exists in understanding that businesses must provide a HDHP to offer an HSA. Six percent of business owners with 101-500 employees answered that their business offers an HSA despite indicating they did not offer an HDHP option, which would not be possible.
"Health savings accounts are effective tools for business owners and employees alike," said
Four out of ten (41 percent) business owners offer their employees an HSA. Another 21 percent are considering one and 38 percent state they are not considering an HSA. The larger the business the more likely it is to offer an HSA: 59 percent of companies with 51 to 100 employees offer an HSA and 60 percent of companies with more than 100 employees offer one, compared to only 25 percent for companies with 50 or fewer employees.
Millennial business owners lead the way
Today, 81 percent of Millennial business owners offer an HSA option, compared to 44 percent of Gen X and 25 percent of Boomer owned businesses.
Millennial business owners also possess a solid knowledge about the important elements of HSAs, in addition to how HSAs can be advantageous for them and their businesses. However, only 31 percent of Millennial business owners knew that HSA balances carry over year-to-year. Lastly, Millennial business owners expressed the greatest interest in speaking with a financial advisor about benefits associated with HSAs, with at least 90 percent saying they'd be interested.
"In an economy with low unemployment, employers are competing for talented workers. Benefits play a key role in attracting and retaining employees," noted Carter. "We believe the growth of health savings accounts follows the same upward trajectory of defined contribution plans. As employers become more familiar with health savings accounts, advisors need to help ensure they understand the associated benefits."
To help advisors have these conversations the
Financial advisors who are interested in learning more about HSAs, upcoming webinars or obtaining complimentary healthcare cost assessments for clients, should call 1-800-626-3112 or visit www.nationwidefinancial.com/hsa.