When we think about solid financial benefits, Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) are at the top of the list. They offer significant tax savings (who doesn’t love that?) and help stretch dollars further on everyday expenses, like doctor’s visits, prescriptions, eyeglasses, and even childcare (with the Dependent Care FSA).

But what good are these benefits if employees don’t understand them and don’t know how to use them?

The roadblocks

We’re all constantly bombarded with information. To reach employees, it’s essential to cut through the chaos. Let’s put the HSA and FSA in the spotlight to reduce common obstacles, like:

• Their complexity, rules, and restrictions.
• They may hold different value for specific demographics, ages, and income levels.
• The functional benefits of these accounts can seem abstract to employees.

Don’t let misunderstandings keep employees from maximizing their HSA and FSA accounts. Whether you offer an HSA, FSA, or both, knowing how to communicate these benefits can make a big difference.

4 tips to explain the HSA & FSA

1. Highlight the differences

   At first glance, HSAs and FSAs may seem similar, and in some ways, they are, but there are substantial differences, such as account ownership and how unused dollars are handled. Opting to compare the two types of accounts side-by-side can help employees spot the differences and make informed decisions.

2. Show them visually

   These accounts have some quirky nuances that can trip people up. Get creative by using infographics to show how the HSA and FSA work. You can also create brief videos (aim for under 2 minutes) that give your employees the information they need in a fun, interactive way.

3. Give examples

   Help employees grasp the pros and cons of each account using real-world examples of the tax-savings. For instance, a sample budget comparing expenses paid with post-tax dollars vs. pre-tax account dollars paints a convincing picture about the benefits of these accounts.

4. Highlight eligible expenses

   When you dive into what qualifies as an eligible expense, you may be surprised. Medical copays and deductibles are a no-brainer, but what about things like blood pressure monitors, COVID-19 tests, and even band-aids? Your employees may not be aware of just how many items can be covered with their HSA or FSA. Point them in the right direction with links to the HSA Store, FSA store, and IRS resources (Publications 502, 503, and 969) so they can take advantage of their tax savings and purchase items they need.

The takeaway

There are so many benefits of HSAs and FSAs. With a few simple strategies, we can help employees understand how to make the most of these accounts—saving them money, enhancing their appreciation, and giving them the tools to make well-informed decisions. We’re here to help!