Retirement advisors have a unique opportunity to offer additional services as more plan sponsors position Health Savings Accounts (HSAs) as a retirement benefit.
In a Wednesday virtual breakout session as part of the Broadridge Fi360 Solutions Annual Conference 2021, HSA subject matter expert Kevin Robertson shared a variety of recommendations on how retirement advisors can use their 401k expertise to show employers how HSA programs can be powerful, cost-effective benefits that can move the needle on retirement readiness.
Robertson, Chief Revenue Officer at Sheboygan, Wis.-based HSA Bank, shared a variety of tips and strategies retirement advisors can use to stand out to clients open to powering up their HSA benefit offerings in a session titled, “Differentiate your practice today: Standout strategies for HSAs.”
Perhaps the best tip—and biggest opportunity to make an impression on employer clients, Robertson said, involves illustrating the power of using a matching contribution strategy, and how it can help benefit dollars go further.
“If you want to demonstrate your value to employers, ask them, ‘Have you incorporated a matching contribution strategy in your HSA program? Because if you haven’t, I have a way to save you money,’” Robertson said, calling it the greatest single lever to impact long-term retirement readiness.
While these strategies are pretty much universally practiced in the 401k industry, that’s not currently the case in the HSA market. Because not every employee will take advantage of the employer match, Robertson illustrated how mixing seed contributions and matching contributions allow employers to go above and beyond what can be done with a simple seed contribution strategy.
“If you quantify this and looking at what this provides to the employer and the employee, it’s going to drive a significantly higher value perception of your benefits,” Robertson added, noting that in his example, three times as much money went into the HSA account for the benefit of the employees without it costing the employer any additional dollars compared to a straight seed contribution strategy.
Another good tip from Robertson was advocating for providing formal decision support for employees making health benefits decisions.
Robertson cited research showing how most employees choose the wrong health plan for their needs, and it typically costs them more than $1,000 per year. They do this primarily for three reasons:
- Inertia – it’s easy to stay with what you’ve always had
- Math – it is time-consuming and in some cases challenging to do the calculations
- (Irrational) deductible aversion (to high-deductible health plans)
But if you encourage employers to spring for formal decision support, with personalized analysis, support and recommendations, Robertson cited more research showing plans offering this had a 3X greater increase in plan migration, an average savings of $1,300 per employee and a 95% satisfaction rate.
Outcomes of decision support include increased employee confidence in their benefits selections, a more equitable benefit environment and lower total healthcare bills for employees and employers.
Among the other HSA “best practices” Robertson covered in the session (which can be accessed on-demand for registered Broadridge Fi360 attendees):
- Aggressive HDHP plan design pricing
- Default account enrollment and contribution participation
- Have a holistic contribution strategy (seed contribution, matching contribution)
- Education and communication efforts all year
Robertson emphasized that retirement advisors have a skill set and knowledge level very different from that of an insurance advisor, which they can use to their advantage in leveraging HSA conversations long dominated by health and employee benefits advisors more focused on spending than saving and investing.
MORE FROM BROADRIDGE Fi360 SOLUTIONS CONFERENCE:
- Tips and Traps for Advisors Serving Group Plans
- SECURE Act, Guaranteed Income, Rollovers at Broadridge Fi360 Conference
- 3 DC Plan Trends That Are Improving Participant Outcomes
- Why Guaranteed Income Matters Now
- What Fiduciaries Need to Know About ESG
- How to Fix the HSA ‘Blind Spot’
- How to Market on Any Budget