The reason your employees aren't getting the care they need

Today's Topic: The HSA ticking Time Bomb you didn't even know you had in my experience employers typically offer an HSA plan for one of two reasons the first is savings and that's the primary reason I see the second is tax advantages or a tax shelter for your highly compensated individuals regardless of the reason the payroll deductions are almost always the least in an HSA plan when offered alongside a traditional PPO and if you have low earners they enroll in this plan because it's all that they can afford the problem is you just inadvertently started the timer on the HSA bomb and here's why deductibles on these types of plans range from typically fifteen hundred dollars to six thousand dollars so let's imagine one of your employees is making about forty thousand dollars a year and is diabetic and they enrolled in the HSA plan they can't afford their medications so they go without them because an expensive medication is the difference between putting food on the table or their ability to pay their rent now a couple years go by and they're in kidney failure and the dialysis costs alone are costing the employer two hundred and fifty thousand dollars per year for the next three years the worst part is the employee is now in collections because they can't even afford their deductible it's unfortunate because this was preventable but the cost barrier for the employee was just too big the biggest proof of this is in 2020 when covid-19 hit the foregone care from covid-19 was a massive explosion and it was highly visible because the cause and effect happened over a one to two year time frame meanwhile the HSA ticking time bombs have been going off all around us for the last 20 years of foregone care this slow bleed wasn't as visible but I can assure you that the combined impact far outweighs anything from covet 19. so let's go back to the two reasons that employers typically offer an HSA plan and let me provide some advice the first is savings and my advice is simply here don't expect an HSA plan to save you money in the long run the short-term gain in savings is likely going to be outweighed by the long-term ticking time bombs the second reason is for tax advantages and my advice here is if you want to implement an HSA to give your highest earners a tax shelter you should do it it's a great reason but if you do just make sure you set the payroll deductions for this plan as the highest payroll deductions amongst all the plans that you offer that way you don't get people enrolling in the plan that you didn't intend to lower earners are almost always going to look for the cheapest option out there lastly if you only offer one plan and that's an HSA plan you should strongly consider a different strategy that will control costs over time.