Open enrollment is crunch time for HR teams, but in all the busyness of these coming weeks, don’t miss the opportunity to empower employees to take control of their health and their finances by educating them on how to use their health savings account (HSA).
HSAs are a powerful benefit, yet many employees miss out on saving hundreds or even thousands of dollars each year when they fail to enroll in this benefit. The reasons are familiar: HSAs can feel confusing, employees may not know how to use them, or they may believe they cannot afford to contribute. HR and benefits leaders can change these perceptions by turning open enrollment into a true opportunity for engagement.
The Case for Employer-Led Education
While HSAs have been around for more than 20 years, many HSA users say they are confused about how to use their account, and others feel they can’t afford to fund their account. However, nearly 30% of account holders say they would contribute more if they understood what is covered and how the HSA can support their healthcare spending. On the flip side, when individuals understand the basics of eligibility and see how routine purchases can fit into their account, they are far more likely to fund, use, and keep their HSAs active. According to industry research, education can increase HSA contributions by 30%, improve account retention, and drive higher employee satisfaction, overall.
Whether employees are just starting out and not fully funding their accounts, if they’re regularly using their funds to pay for healthcare products and services, or if they’re saving for retirement.
Here are four facts about HSAs that all employees should know during open enrollment.
- Everyday Use and Expanding Eligibility. While the savings potential of HSAs is a definite advantage for employees of all ages, the ability to use these tax-free funds for everyday expenses should not be overlooked. HSA Store estimates that the average household spends $1,600 on healthcare expenses that could be purchased with tax-free HSA funds. Why not help your employees realize every possible savings from their account by directing them to a searchable list of eligible expenses, so they can learn how to use tax-free funds to purchase any necessities. Keep in mind, as employees become savvier about how they can use their funds, they are likely to increase their contributions, which in turn increases their tax savings.
- Account Ownership. Account ownership is a key feature of the HSA, because it is fully employee owned, even if the employee retires or changes jobs. Any contributions made by the employer also remain with the account holder, regardless of employment status. HSA funds also never expire, and the balance rolls over from year to year. For 2026, the IRS has set HSA contribution limits at $4,400 for individuals and $8,750 for families, with an additional $1,000 catch-up contribution for those age 55 and older.
- The Triple Tax Advantage. One of the most appealing features of the HSA is the unique triple tax advantage. Make sure employees understand that their contributions reduce their taxable income; their account balance grows tax-free; and withdrawals for qualified medical expenses are also tax-free. This means employees save money when they contribute, while their funds grow, and when they spend. Even small monthly contributions compound over time, making HSAs an important complement to retirement vehicles such as a 401(k) or an IRA.
- Account Management Tools. For employees who are already enrolled in an HSA, be sure to make them aware of digital solutions that will help them effectively manage their funds. For example, calculators that help them estimate their tax savings, project the future value of their HSA, or a mobile app that allows account holders to identify eligible purchases and track expenses for tax purposes all play a part in improving the employee HSA experience and supporting both health and financial wellbeing for employees.
When employees understand that HSAs are not limited to doctor’s offices or one-off expenses, they see the bigger picture. They begin to connect the account to everyday life, from prescriptions to digital health devices, while also appreciating its role in retirement planning. This dual understanding encourages both immediate use and future-focused saving. Employers who invest in educating their workforce can see higher adoption rates, greater employee confidence, and improved satisfaction with their benefits program.
Itamar Romanini is vice president and general manager of HSA Store and a long-time leader and innovator in consumer-directed healthcare and HSAs. HSA Store is part of the Health-E Commerce family of brands, which also includes FSA Store and Caring Mill.