As a third-party administrator (TPA), we consistently receive feedback from our clients that employees struggle to fully grasp benefits, especially during Open Enrollment when it’s most crucial. Within the pre-tax benefit space, your work is cut out for you as a human resource professional.
Now that you’ve explained (again) how insurance works, you get to begin the real work of teaching employees the difference between Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs). It’s a totally different ball game. Frankly, most employers don’t have the time or capacity to provide a full-blown education to employees. (After all, isn’t that what we TPAs are for?)
That’s why we wanted to give you 3 ideas that will allow you to communicate about HSAs — one of the most under-utilized pre-tax benefits, but also one of the most powerful when it comes to savings potential.
1. Communicate about HSAs with rhyming phrases
It’s likely that if you quizzed your employees on what an FSA stands for and what an HSA stands for, they would answer incorrectly. To develop their understanding of the differences, you can employ a few methods:
- Introduce catchphrases. Most employees know that the phrase “use it or lose it” refers to FSAs. Expand employees’ knowledge of HSAs by introducing the phrase “stow it and grow it.” This kills two birds with one stone: You have a new way to talk about how HSAs work and you can help differentiate HSAs and FSAs, reducing confusion.
- Make up your own rhyme. In addition to “stow it and grow it,” which addresses the treatment of funds, you can explore additional easy-to-remember rhymes that tie in key concepts, such as “HSA for a Rainy Day.” Employees already know what “saving money for a rainy day” means. By contrast, an FSA version might be “FSA All Day,” implying frequent usage.
Rhyming works. An entrepreneur and a hip-hop artist managed to turn ‘The Scarlett Letter’ into a rap song, capturing the main points of the story but in a digestible and easy-to-memorize fashion. Rhyming opens up your possibilities when it comes to teaching topics known for being difficult to retain.
2. Communicate about HSAs by leveraging existing schemas
Without going into a full-blown psychology lesson, your brain builds something called schemas that let you take in new information and then sort it into an existing bucket.
Think of it like drawers in the kitchen. There is a drawer for silverware and a drawer for snacks. When you see a fork, it goes into the silverware drawer. What if someone gives you chopsticks? Where would you put them? The silverware drawer.
But if someone gives you a set of tongs, where do you put them? You’ll have to think a little longer about where they fit or if an entirely new drawer needs to be created to store them.
Your brain acts in a similar way. If you are presented with information that doesn’t have an existing bucket, it will take longer to store. This is why drawing on existing knowledge and activating schemas helps your employees learn faster.
When it comes to HSAs, your employees might not have heard of the account. But most of them have heard of a 401(k). They know that it is retirement money, it takes some time to build, and it can only be accessed after a certain period of time.
So, when you are telling employees about an HSA, you can say “Think of it a healthcare 401(k).” You’ve effectively primed them to think of their “Money for Later” bucket where the new information of an HSA can go.
If more you can play on existing categories and associations in people’s minds, the easier it will be for them to store and draw out information from those categories in the future.
3. Communicate about HSAs by flipping the script
It can be tempting to use the industry-standard description of an HSA-compatible plan as a “high-deductible plan.” What our partners have found us is that one small adjustment can have a big impact: Switch out “high-deductible health plan” with “low-cost premium plan.”
This reframes the focus from what employees are paying to what they are saving. (You could also argue that schemas are again at work here, as many of us have a mental “Save Money” bucket and thus have a positive association with the term “low-cost”.)
A warning: Memory can be tricky. Reframing and schemas helpful but are not a silver bullet. If your employees are used to hearing “high deductible plan” and you say “low-cost premium plan” they might misremember it later as a low deductible plan.
To keep low-cost premium plans separate from low-deductible plans, illustrate the impact of each plan.
You can provide side-by-side examples through a simple visual to show the impact of enrolling in an HSA. Show the difference between how much money a person will have if they do or don’t enroll in an HSA.
To drive home the point, make sure you show a variety of examples to increase relevancy across different groups. A single man in his 30s will experience HSA savings differently than a two-parent family with two kids.
Kick start your Open Enrollment
That’s it! If you liked these three ideas to communicate about HSAs, you will want to see how to in our Introductory Guide to HSA Adoption. Learn how to:
- Design a plan backed by practical best practices
- Increase plan adoption with holistic contribution models
- Effectively engage employees with messaging strategies