Why do you need a Health Spending Account? As an employer, your employee benefits are part of what you can bring to the table, and can be just as important as salary. They’re a crucial part in enticing top talent, winning over employee loyalty, and making sure your employees are physically and emotionally able to do their best work.
In a 2019 study conducted by Unum, 41% of workers said they’re likely to look for a new job with better benefits. This number is even higher among Millennials (57%) and Gen Zers (65%).
So when you provide these benefits, you of course want them to be impactful. After all, what’s the point of paying for something that is underutilized or redundant to the majority of your employees?
COVID-19 has drastically changed many of our lives, and your employees’ lives have likely changed with it – from their day-to-day routine, to the services they use, to the pain points they experience. The employee benefits you may have once put care and thought into choosing may not be so relevant anymore.
COVID-19 has Exposed Deficiencies in Traditional Plans
If you’ve been putting off routine dental checkups or massages due to public health concerns, you wouldn’t be the only one. 2020 saw record low employee usage rates in visits to almost all non-emergency, high frequency type visits – think dental cleanings, massage therapy/acupuncture, chiropractic, etc.
However, employers under traditional insurance plans have been obligated to continue paying their monthly premiums on coverage – only now, much of this coverage is going unused, and employers are unlikely to ever see a return on their premiums.
Redundancies and Inefficiencies
On the other hand, many employees aren’t using their coverage in certain areas; meanwhile they still may be paying out of pocket in other areas that they actually require, such as prescription drugs or counselling.
Take, for example, the paramedical area of coverage; most plans offer a set amount of coverage per year for health practitioners including, but aren’t limited to:
Acupuncturists, Audiologists, Chiropractors, Chiropodists, Dieticians, Naturopaths, Occupational Therapists, Osteopaths, Physiotherapists, Podiatrists, Psychologists, Registered Massage Therapists, Social Workers, and Speech Therapists.
It’s highly improbable that any employee would require a visit to each single aforementioned practitioner in a given year. More likely, the average employee may require multiple visits to a handful of health practitioners and pay out of pocket when their coverage runs out. The other paramedical categories that aren’t used merely act as “hypothetical coverage.”
In other words, employers are paying for coverage in many areas that are going unused, while not providing enough coverage in categories that employees make the most use of. With a one-size-fits-all plan, these types of gaps naturally occur.
What are Health Spending Accounts (HSAs)?
HSAs are really quite simple. A Health Spending Account combines all categories of health expenses (e.g. health and drug, dental, and paramedical expenses) into one lump sum account which allows employees to use their coverage for what they actually need. Employers put in a monthly contribution into their employees’ Health Spending Accounts, which acts as their HSA balance to be used towards health expenses.
For example, if an employee has $400 in their HSA and has a session with their social worker for $120, they can pay using their HSA. Their HSA will be left with a balance of $280. No deductibles, no co-insurance. Simple!
According to Metlife, 80% of employees would value benefits customized to individual circumstances and age.
Health Spending Accounts are an excellent cost-effective alternative to traditional one-size-fits-all plans which offer pricey, often redundant coverage, especially during unforeseen times when employees forego certain types of non-emergency visits, such as during a pandemic. It’s an effective way to ensure that the coverage you offer as an employer is relevant to your employees, while avoiding paying for coverage on unused services.
Learn more about Honeybee Health Spending Accounts
What are you waiting for?
Honeybee offers an accounts-only plan consisting of a Health Spending Account plus Allowance Account. We’ll work with your advisor to create a starter benefits plan or add flexible accounts to your current plan!