How Advisors Can Help Employers Maximize HSA Strategies
Americans are using health savings accounts (HSAs) to cope with higher healthcare costs, amidst rising inflation and daily expenses.
A recent report from Lively found that a greater share of this year’s respondents are choosing to tap into their accounts. The 2025 HSA Spend Report showed that HSA withdrawals increased 13% in 2024, from $1,162 to $1,320, and now closely reflects the national withdrawal average of $1,370.
The percentage of assets retained also dropped to 20%, signaling that more have withdrawn from their accounts.
Healthcare cost expenses, along with higher daily prices, have left a negative impact on working Americans, Lively research shows. Eighty-four percent of respondents say healthcare expenses have prevented them from reaching their financial goals, while 83% add that the costs have made it difficult to save for retirement. Another 78% say paying off healthcare costs have delayed other major financial actions, like saving for emergencies or paying off debt.
As healthcare costs are projected to continue growing, with research from KFF estimating a 7% increase in premiums in 2025, Lively experts touched on the significance in educating participants about utilizing HSAs strategically, and how financial advisors can voice these tactics to their plan sponsor clients.
“By steering sponsors toward high‑quality providers and prioritizing employee education, advisors help ensure the benefit delivers on its promise—lowering healthcare costs, for both employers and employees, boosting engagement and strengthening recruitment and retention,” told Shobin Uralil, co-founder and COO of Lively, to 401(k) Specialist. “On the other hand, choosing the wrong vendor can result in low utilization, administrative headaches, unhappy—and vocal—employees, employee turnover, and unexpected costs. This will reflect poorly on both the advisor and the HR administrator.”
Some action points include bundling benefits to support employees in the current economic environment, like pairing HSAs with other healthcare tools like LPFSAs, HRAs, and LSAs; contributing to employees’ accounts; and choosing a benefits provider with a modern platform that employs a mobile app, a simple UX design, paperless enrollment, and user-friendly dashboards, Uralil noted. Other features like first dollar investing, lower thresholds, and auto-invest tools can also help increase adoption.
Employers should also seek responsive customer service, varied investment options and a debit card so employees can both grow and spend their HSA funds easily, Uralil added.
“When selecting a benefits provider, employers should concentrate on companies that put their employees at the center of their benefits program. This should include features that make benefits easy to adopt and manage for employees … Ultimately, the choice of provider can determine whether an HSA program drives adoption and satisfaction or creates frustration and low utilization,” he said.
Finally, prioritizing education outside of the open enrollment period ensures employees are receiving thoughtful communications about their healthcare needs year-round. Throughout the year, employers should host mid-year check-ins and provide regular, seasonally relevant education materials that show employees how to best utilize the tools they have, Lively’s research states.
As an example, Uralil commented that spending on flexible spending accounts (FSAs) peaks late in the year as employees urgently spend their unused funds before the end of the year. More upfront communications could help normalize FSA usage through the year.
“Employees are presented with information overload during open enrollment. Employees see the impact of benefits, costs, and hopefully spending in different ways throughout the year,” he said. Creating personalized and seasonal education per product helps employees optimize their benefits selection and usage.”
SEE ALSO:
HSA Assets Jumps to $147B for Year-End 2024
Lively Reports 35% Surge in HSA Balances
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
