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Faced with the prospect of lower take-home pay, many Americans have a hard time seeing the value of HSAs, FSAs, emergency savings, or similar accounts available through their employer.


While the trend is discouraging, it also represents an opportunity for strategic and forward-thinking organizations to make a big difference in their employees’ lives.

Enrollment in health savings account (HSA)-eligible health plans now covers nearly 3 in 10 employees in the U.S. Unfortunately, only one-half of HSA owners actually contribute to their accounts.

Meanwhile, other consumer-directed accounts are similarly underfunded and underutilized. These include flexible spending accounts (FSAs), savings goal accounts, commuter accounts and others that support holistic employee financial well-being.

Why the aversion to putting money aside?

Eighty percent of Americans now report they live paycheck to paycheck, making the prospect of even lower take-home pay a non-starter. Worse, many are already “in the hole.” The average American's total credit card balance exceeds $5,500 (30% of their total available credit limit). And, 25% of adults admit they do not pay all their bills on time while a full 8% have debts in collections.

With only five states mandating a personal finance course in high school, historically low levels of financial literacy and poor spending habits should come as no surprise. But the American worker must also contend with factors that are well beyond their control, including long-term financial obligations they could not have imagined 10 or 20 years ago.

Millennials are burdened with crushing student loan debt. Gen X'ers are struggling to put their own kids through college while trying to pay off the house. And, many Boomers who were looking forward to retirement may find themselves looking for work to supplement their meager retirement savings.

Opportunity knocks

Regardless of the underlying causes of Americans’ poor financial health or societal trends, employers are uniquely qualified to help employees see the value of using and maximizing the consumer-directed accounts available to them.

Those who go out of their way to ensure employees are making the most of these important benefits will demonstrate that they have their employees’ best interests at heart. In fact, 67% of employees say they would be attracted to an employer who cares more about their financial well-being. Just as important, investing in employee financial well-being can also decrease losses in productivity due to financial stressors.

The right tools can help

Whether you offer an HSA with your high-deductible health plan, an FSA for health or dependent care, automatic savings contributions for emergencies, commuter accounts, or all the above, having the right tools can make all the difference. Here are three tips for ensuring success.

  1. Make enrolling easy. For many employees, benefits engagement peaks during annual enrollment and then drops off the radar. Healthy employees, especially Millennials and Gen Zs, may only have one or two claims all year, making it less likely they’ll proactively manage contributions. While you have their attention during annual enrollment, provide employees with the path of least resistance to enrolling in their consumer-directed accounts. Systems that interface seamlessly with your benefits administration platform are best suited for this. Some even offer automatic enrollment based on certain criteria, such as selecting a high-deductible health plan or the employer’s willingness to help fund HSAs. Those that require the employee to leave the system or enroll later will result in much lower participation rates.
  2. Provide ongoing educational support. Because of the connection many consumer-directed accounts have with health and welfare benefits, those that are integrated into your enrollment platform and total rewards solution offer more educational opportunities than stand-alone products. Look for a vendor with a robust set of educational tools, such as a recommendation engine, modeling calculators, and marketing tools. Providers who use third-party systems may offer single-sign-on (SSO) capability but still require the user to go back and forth between screens resulting in poor utilization rates and lower engagement overall.
  3. Aim for a single experience across all accounts. As the complexity of consumer-directed accounts increases, every effort to make things simple for you, your team, and your employees is an investment in saving time and reducing confusion, stress, and calls to your office. Look for a vendor who can offer one card, one online and mobile experience, and one support model for both enrollment and consumer accounts. Make sure they support your current and future combination of accounts, including FSA, HSA, HRA, emergency savings, dependent care, commuter, retiree or premium reimbursement, incentive accounts, and more.

Ready to learn more about the most effective way to deliver and administer consumer-directed accounts? Read our e-book below. 

Consumer-Directed Accounts

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