TREASURY SERVICES
Best Practices for
Implementing a Health
Savings Account (HSA)
Program
Implementing a successful HSA program is largely dependent on
educating employees about their benefits and motivating them to
enroll. Choosing the right HSA administrator to partner with is also a
critical success factor. This white paper outlines key best practices
that can help your firm effectively build and manage an HSA program.
TABLE OF CONTENTS
Case Study in Best
Practices – J.P. Morgan................................. 2
1. Best Practices: Designing
an HSA Program ........................................... 3
2. Best Practices: Selecting
an HSA Administrator................................... 5
3. Best Practices: Communicating
Effectively to Employees............................... 7
Conclusion ....................................................8
About the Authors ........................................9
About J.P. Morgan ........................................9
For more information, please contact your
J.P. Morgan Treasury Services representative
or visit jpmorgan.com/visit/hsa.
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC
All services are subject to applicable laws and regulations and service terms.
1
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
Many companies are finding that the addition of an HSA option to their healthcare benefits menu presents a
viable, practical solution to the health insurance challenges they face. Since its introduction five years ago, the
Health Savings Account market has seen significant growth across many industries. By year-end 2008, there
were an estimated three million HSAs with deposits of more than $3 billion – and the number of HSAs is
expected to quadruple by 2012 (Figure 1)1.
Case Study in Best
Practices – J.P. Morgan
An early entrant into the industry, J.P. Morgan
administers HSA programs for nearly 10,000
companies and provides HSA cash and
investment services for hundreds of
thousands of individuals nationwide.
As our employer clients’ adoption of HSAs
has grown, J.P. Morgan’s healthcare team has
gained significant experience working with
clients in all aspects of HSA programs, from
program discovery through implementation
and ongoing administration and management.
Key to any company’s success is to develop a
framework that can help it achieve both
short- and long-term program goals.
The framework used by J.P. Morgan’s most
successful companies is based on three
sets of best practices:
1. Best Practices for Designing a
Program to meet short- and long-term
enrollment goals.
• Controlling rising healthcare costs
Number of HSAs (millions)
8.0%
12.5
Number of HSAs
Percentage with HSAs
7.0%
6.0%
10
Share of Insured (%)
In speaking with benefit managers, financial
officers and other decision-makers, they give
the following principal reasons for introducing
a health plan that includes an HSA option:
3. Best Practices for Effectively
Communicating the benefits of an
HSA to employees.
14
12
The best practices presented here reflect the
experience gathered in meeting the needs of
companies representing the full spectrum of
American employers — ranging from those
with just two people on their payroll to firms
with more than 100,000 employees.
2. Best Practices for Selecting an HSA
Administrator with the requisite expertise
and core capabilities to meet your firm’s
and your employees’ needs. This includes
identifying an HSA that is easy to use for
both human resource administrators and
a diverse workforce.
9.1
5.0%
8
6.5
4.0%
6
3.0%
4.5
4
3.0
2
0.7
1.4
2.0%
1.9
1.0%
0.0%
0
2005
2006
2007
2008
2009
2010
2011
2012
Figure 1: Current and Estimated HSA Growth
(Figure 2)
• Introducing consumer choice as a factor
in healthcare purchase decisions
• Facilitating employees’ opportunity to
increase retirement savings
• Providing an additional savings vehicle
to help meet retiree medical costs
Healthcare premiums continue to outpace
other key indicators of affordability, including
inflation and workers’ earnings. In response,
many companies have sought lower-cost
alternatives such as HSA-compatible benefits
to mitigate the impact of healthcare inflation
on themselves and their employees.
1
2
20%
Health Insurance Premiums
Workers’ Earnings
Overall Compensation
18.0%
18%
16%
13.9%
14%
14.0%
12.9%
12.0%
12%
10.9%
10%
8.2%
8.5%
8%
6%
5.3%
11.2%
9.2%
7.7%
6.1%
4%
2%
0.8%
0%
2.6%
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Figure 2: Increase in Health Insurance Premiums Compared to Other Indicators 2
Source: HSAs: Moving Beyond Growing Pains, Celent, 2008
Source: Kaiser Family Foundation/HRET Survey of Employer Health Benefits, 2007
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
2
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
1. Best Practices:
Designing an HSA Program
The groundwork for designing an effective
HSA program for your firm is gaining a clear
understanding of what HSAs are and the value
of this healthcare option to both companies
and their employees.
unexpected healthcare expenses incurred in
later life. Funds may be carried over from
year to year, and owners have the potential
for greater earnings by investing through an
HSA investment account. Unlike FSAs, there is
no “use it or lose it” provision. Unused funds
can also be withdrawn on a taxable basis for
any purpose after age 655, so HSA funds can
even contribute to a more secure retirement.
What is a Health Savings
Account?
Why do companies value HSAs?
An HSA is a special tax-advantaged account
owned by an individual who can use the funds
to pay for current or future medical expenses.
HSAs offer tangible cost benefits while
providing employees with the flexibility to
manage their healthcare needs.
Funds may be deposited via payroll deduction,
by employer contributions or by employee
direct deposits3. Once deposited, the money
earns interest tax-free year after year. Funds
can be withdrawn tax-free at any time if they
are used for qualified medical expenses.
CDHPs help companies control their rising
healthcare premiums. At the same time, they
reduce a company’s tax liabilities when
employees make pretax contributions. HSAs
also allow firms to offer an appealing
healthcare program with affordable rates and
competitive features. If designed
appropriately, an HSA program is a benefit
that enhances a company’s ability to attract
and retain top talent, because it offers every
employee greater control over his or her
healthcare decision-making.
For employees to be eligible to open an HSA,
they must enroll in a qualified high-deductible
health plan (HDHP)4. The HSA and the HDHP in
combination is an example of what is
commonly referred to as a consumer-driven
health plan (CDHP). CDHPs encompass a
number of healthcare strategies that
encourage consumers to become involved in
their healthcare and health coverage
decisions. Other examples of CDHP products
are Flexible Spending Accounts (FSAs) and
Health Reimbursement Arrangements (HRAs).
Why do employees value HSAs?
Contributions to HSAs are free from federal
and most state taxes. Therefore, an HSA can
help employees save substantially on all kinds
of qualified medical expenses — from
deductibles and copays in a company’s HDHP
to pharmacy bills, dental care, vision care and
much more.
Because the account is fully portable for life,
the money accumulated in an HSA belongs to
employees even if they change jobs. Unused
HSA balances that grow over time can
eventually be used to help offset large or
3
Key decision factors
for employees
While the tax and asset accumulation benefits
associated with an HSA are compelling, the
underlying health benefit is most important to
the majority of employees.
When making their benefits selection,
employees tend to focus primarily on the
health coverage related to an HSA program.
Their key decision factors are deductible
levels, out-of-pocket limits and preventive
coverage. Each of these factors tends to be
weighed against the associated premium
differentials. Employees may also regard
moving from a traditional health benefit plan
with copayments or low deductibles to a
consumer-driven health plan as a significant
benefits change. However, for many
employees, a closer look at overall CDHP
For the 2009 tax year, the maximum annual contribution is $3,000 for individuals and $5,950 for families.
In 2009, the Treasury Department and Internal Revenue Service define an HDHP as a plan with a minimum single/family
deductible of $1,150/$2,300.
5
Withdrawals for nonqualified expenses may be made prior to age 65, but will incur a 10% federal tax penalty, except in the
case of distributions made after death or disability of the accountholder.
4
benefits and medical coverage levels can
reveal that they are more advantageous than
traditional options (e.g., PPOs and HMOs),
which often do not provide first-dollar
coverage for preventive services.
HSAs at a Glance
• An HSA holder must have a qualified
high-deductible health plan.
• Contributions to an HSA are free from
federal tax and most state tax.
• HSA assets can earn interest and be invested.
• HSA balances roll over from year to year.
— No “use it or lose it” provision as
with FSAs
• HSA assets are the property of the
accountholder, not the employer.
• HSAs are portable — employees keep
their HSAs even if they change jobs.
• HSA assets can be spent on qualified
medical expenses.
— Otherwise, income tax and penalties will
apply.
— Individuals are responsible for
determining whether an expense
is qualified; there is no third-party
substantiation.
• Most HSAs have debit card access and
many offer online bill pay and paper checks.
• Employers, employees and individuals can
all contribute to an HSA.
Keep it simple
Companies that are successful at introducing
an HSA plan help employees make the best
healthcare choices. They begin by carefully
designing a CDHP that is simple to understand
and easy to use. J.P. Morgan clients have
found it beneficial to provide a manageable
number of overall healthcare options during
enrollment periods. For example, smaller
companies may want to limit their healthcare
options to one or two choices, while larger
companies may not want to exceed four
options. Too many choices in the start-up
phase may lead to employee confusion. Many
employees will tend to select a plan based on
a single factor — cost, for example — rather
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
3
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
than more completely evaluating how the
offering addresses their needs. Additionally,
plan selection and cost estimator tools can
help employees evaluate which health plan is
most appropriate for them. More information
on these important decision support tools is
outlined in the Best Practices: Communicating
Effectively to Employees section on page 7.
If multiple plans are offered, subtle changes in
the previous years’ healthcare options (e.g.,
changing plan names or reordering options)
create a greater likelihood that employees will
take the time to reexplore their benefits for
the coming year. To further encourage
employee participation in a new HSA plan,
employers can choose to offer lower
deductibles, higher levels of coinsurance and
front-loaded or accelerated HSA funding.
Preventive care
and healthful living
Companies experiencing significant
participation in their HSA plan tend to provide
employees with 100% coverage (not subject
to the deductible) for preventive care services
such as routine physicals, immunizations, etc.
In fact, according to America’s Health
Insurance Plans (AHIP)6, 84% of all HSA/HDHP
policies purchased in the group market
provide this level of benefit.
Many clients believe preventive care is the
key to keeping costs down, providing
financial incentives to employees who follow
a recommended regimen of care. Incentives
can also be tied to activities that promote a
healthful lifestyle such as smoking cessation
programs and enrollment in companysponsored programs that can directly affect
employees’ ability to stay healthy.
of credit also help offset large claims incurred
early in the year and/or early in the
payroll/contribution cycle.
Influence of early/ongoing
communication
Companies with high rates of HSA enrollment
tend to communicate early in the benefits
cycle regarding plan changes and to
emphasize to their employees the relationship
between benefit levels and the associated
"true” costs of healthcare. These companies
also find that subsequent changes to coverage
levels are more easily understood, especially
when the employer continues to promote
employee education on healthcare costs. A
more complete analysis of communications
approaches leading up to and moving beyond
the enrollment period is discussed on page 7
under Best Practices: Communicating
Effectively to Employees.
The impact of employer
contributions on employee
saving activity
Employers that contribute to HSAs
demonstrate their commitment to an HSA
program. This commitment can be further
reinforced by developing programs to engage
and educate employees about the spending
and saving advantages of HSAs.
6
Employee contributions in groups that
do not receive any employer funds are
contributing 23% less, and their
balances average $1,332.
• Matching contributions may be the
most effective way to encourage HSA
participation.
—
Companies that matched contributions
experienced higher enrollment rates
and had employees with 25% higher
balances compared to firms that
contributed in a lump-sum or a set
amount allocated over the payroll
cycles. Typically, employers match
between 50% and 100% of HSA
contributions.
Key Considerations in HSA Design
• Keep it simple and offer a manageable
number of health plan options.
• Provide comparable benefit levels
and cover preventive care at 100%.
• Plan for future design modifications
and incentives for positive behavior changes.
• Consider a line of credit to help offset
unexpected medical expenses early in the
year.
• Encourage participation by matching HSA
contributions or by providing lump-sum
funding early in the year.
In 2008, J.P. Morgan conducted a client
analysis of programs where employer
contributions were made. Some of the key
findings included:
• Almost half of all employers were making
contributions to employee HSAs.
—
These employers contributed $775 on
average per account annually, with the
average employee contribution
equaling $1,725 — for a total average
contribution of $2,500.
—
The average annual spend in 2008
was $1,876, indicating that most
employees save money via the
HSA but are willing to spend when
necessary.
Offering a line of credit
Some employers offer a line of credit to help
employees cover any unexpected medical
expenses that exceed the balance in their
HSA. This option is designed to provide a
sense of security for those employees more
accustomed to lower out-of-pocket expenses.
Employees can choose to reimburse
themselves from the HSA at a later time. Lines
—
America’s Health Insurance Plans (AHIP): A Survey of Preventive Benefits in Health Savings Account (HSA) Plans, July 2007
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
4
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
2. Best Practices: Selecting
an HSA Administrator
Employers new to HSAs may be working with
a new type of benefits administrator — an
HSA custodian or trustee. A requirement of
the Medicare Modernization Act of 2003 is
that HSA assets be held by a qualified entity,
typically a bank or other financial institution.
Most companies have found that the best
financial institutions provide much more than
a place to house HSA assets. In fact, the right
HSA administrator can play an integral part in
helping firms increase HSA participation and
employee satisfaction. Employers therefore
usually conduct a careful inquiry into the
products, capabilities and track record of
potential HSA administrators, focusing on
the following:
Demonstrated success: The administrator
should be asked to demonstrate its success in
implementing these programs in terms of HSA
enrollment and penetration rates7, providing
case studies and references. Implementation
teams with truly significant experience in
benefits administration and in working with
benefits areas are often key to a firm’s ability
to start up and maintain a successful program
for years to come.
Most companies have found
that the best financial
institutions provide much
more than a place to house
HSA assets.
Administrative capabilities: Firms
should carefully consider the ease of both
administration and implementation.
Administrators’ capabilities are a vital
consideration, particularly for employers
with a high volume of enrollment and
ongoing status changes due to a dynamic
workforce. A simple enrollment process,
either Web or paper based, is essential.
7
HSA Calculators
Flyers and Reminders
HSA Educational Video with Real-Life Examples
Product Overview Document (and Templates)
Awareness Posters
Figure 3: Tools for communicating your HSA program are available. J.P. Morgan has
developed employee-facing marketing materials under its consumer brand, Chase.
Comprehensive reporting is also critical to the
effective management of an HSA program as
is a dedicated support team that provides
assistance when needed.
Outstanding employee communications:
Administrators should provide turnkey
communication materials that can be
customized for the firm. One example is an
interactive HSA adoption kit (Figure 3).
A trusted custodian: Administrators should
have a good reputation; excellent track
record; strong balance sheet; sophisticated
offering of core banking, transaction and
investment services; integrated asset
management capabilities and a strong
financial base. For those employers with a
regional or national employee base, a large
retail/branch/ATM presence may also
be important.
Important considerations
Does the HSA administrator you are
evaluating offer these key elements?
• A full menu of customizable marketing
communications and enrollment materials
for your employees
• A simple enrollment process for your
employees, either Web or paper based
• Comprehensive reporting that allows you to
manage your HSA program and respond to
management requests
• A dedicated support team to provide
assistance when you need it
• A strong reputation and balance sheet that
you can depend on through difficult times
Penetration rate is the rate of eligible health plan enrollees to active HSA participants.
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
5
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
An implementation checklist
HSA CASE STUDY #1
Selecting the appropriate administrator and executing seamless implementation require careful
consideration and planning. This checklist is designed to help employers begin to identify key
attributes of quality administrators.
A manufacturing company in the Midwest with
1,000 eligible employees used a hands-on
approach when designing its HSA program. The
benefits staff emphasized controlling healthcare
1. Select the administrator and the team
— Ability to preallocate a fund mix for future
investments?
• Confirm that your overall HSA strategies are
aligned with those of the administrator:
— Quick turnaround times for cash/
investment transfers?
— Are the accounts going to be used to
— Does the administrator provide education
and tools to match the needs of your
employees?
• Evaluate the administrator’s length of time
traditional options. The program included full
coverage for preventive care and premium
discounts (nonuse of tobacco and online risk
assessments).
spend, save, invest for the future, or all
of the above?
costs and offered HSAs as a full replacement to
3. Analyze the functionality made
available to the employer
• Will the program be easy to administer
for internal support teams?
The company committed to contributing 60% of
the annual deductible to the HSAs and
determined that a mix of lump-sum funding and
contributions over the payroll cycles was the
— Coordinating payroll deductions
best funding strategy. In January, employees
offering HSA services and number of clients
— Sending files to the custodian
received half of their annual employer
supported.
— Authorizing changes
contribution. The remaining 50% contribution
— Accessing online tools for basic program
was divided throughout the next
• Inquire about the implementation team’s
experience working in:
— Banking
administration
• What type of reporting is provided to
11 months.
Selecting an HSA administrator included an
— Healthcare
help manage the program and measure success?
extensive RFP process with finalist meetings,
— Benefits
Reporting suites should help employers identify:
presentations and the contacting of HSA
2. Examine the HSA’s specific features
and functionality
— Account volumes and status
administrator references. After making its final
— Balances at program level
selection, the company worked with the
— Funding confirmations and
administrator to set project timelines.
• The HSA should provide basic services
as well as more advanced functionality:
transaction history
played a major part in the success of the
funding contributions
program. Beginning six months prior to
— Debit cards and paper checks to access
funds
A well-organized communications plan also
— Reconciliation reports for
— Analysis of investments programs
— Simple Web site and clear statements
enrollment, the HSA administrator conducted
Train the Trainer sessions to ensure that the
— Call Center expertise for live help
4. Design the communications plan
staff was prepared for enrollment sessions as
— Low-/no-fee access to large ATM networks
• Early in the evaluation process, request details
well as questions from employees. The company
— Integrated access to investments
— Online and phone-based self-service and
reporting
• Can the offering adapt to the needs of a diverse
workforce?
— Are there multiple options for account
enrollment (paper and electronic)?
— Can a line of credit be offered to help
provide a safety net for employees?
— Are there options for employees to service
about the HSA administrator’s capabilities to
posted FAQs and educational materials on the
support the planning and implementation of a
corporate intranet and encouraged employees
customizable communications program for your
to learn more.
employees.
• Ensure that your HSA administrator can support
these three key elements in any communications
plan:
One month prior to enrollment, letters were
mailed to the homes of employees to further
educate them and their families. In addition,
both one-on-one and small-group employee
— Training: In partnership with the
HSA administrator, you may want
comprehensive training for human
meetings were conducted with Human
Resources and the HSA administrator to provide
subject matter expertise.
resources, benefits and supervisory
their accounts (e.g., Web-based self-
personnel (commonly referred to as Train
Within the first year, the company experienced a
service, live customer service support)?
the Trainer sessions).
10% reduction in overall medical claims. More
— Are customer service representatives
HSA experts?
• Are features for investors included such as:
— Integrated investment functionality?
— A wide range of funds and risk levels for a
diverse employee base?
— Customization of printed materials,
than 65% of employees had HSA savings left for
including access to standard
future years. Additionally, the number of
communications templates
inquiries and discussions on healthcare from the
— Webinar/on-site support for open
enrollment
employee base increased, as well as awareness
about healthcare costs. To continue to promote
enrollment, the company did not increase
premiums in the second year.
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
6
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
3. Best Practices:
Communicating Effectively
to Employees
Encouraging employees to take ownership of
their healthcare/benefits decisions can be a
challenge. Studies show the same challenge
surrounded the growth of 401(k) plans in the
1980s. Employees tend to delay or be
disengaged from retirement and healthcare
decisions, which they view as complex and
difficult. The result is often inaction or
suboptimal decisions that may not be in the
employee's long-term interests8.
Experienced HSA administrators can help
employees overcome common hurdles posed
by any benefits change. In fact, next
to employer contributions and a strong
underlying health plan, the HSA
administrators’ communication capabilities
play the most important role in helping to
drive enrollment and the achievement of key
program goals.
Employers have learned that a well thoughtout, staged employee communications plan
rolled out over several months in advance of
the actual enrollment period allows
employees time to fully understand the new
benefits — and reduces confusion during the
busy enrollment season. Employee
communications plans will vary based on a
company’s size and needs, however, you’ll
find a sample HSA employee communications
plan below.
Professionally developed, extensive
communication tools can provide answers to
questions and address concerns about HSAs.
Examples of employee-facing materials that
J.P. Morgan developed for clients to leverage
throughout their HSA enrollment and
adoption efforts can be found on page 5.
Sample HSA Communications Plan
4 to 6 Months Prior
to Enrollment
2 to 4 Months Prior
to Enrollment
1 Month Prior
to Enrollment
Open
Enrollment
Post
Enrollment
Preintroduce open enrollment
by increasing HSA awareness.
Communicate HSA/CDHP
details. Provide comparisons
to traditional options.
Communicate final HSA/CDHP
details.
Keep employees engaged
with ongoing support and
preparation for next year’s
plan.
GOALS
Raise general awareness about
benefits changes and strategy.
Provide details on HSA 101.
Promote full suite of HSA
resources.
Offer tools to help employees
understand options for new
benefit year.
SENIOR MANAGEMENT
Demonstrate senior
management commitment.
Provide ongoing messaging
and participation in benefit
events, if applicable.
Recognize there will be
questions; assure employees
the company will assist them.
Consider following up with
employees on impact new plan
has had to overall benefit
expenses.
COMPANY COMMUNICATIONS
Use existing communications
channels to reinforce
management messages as
well as to archive information
for future reference.
HSA 101: Introduction of
HSA concept with access to
introductory videos,
condensed brochures and
printed materials
• HSA education
Consider a separate mailing to
employee homes to ensure that
the spouse/family members
are involved in the decision
process.
• Postcards to home address
• Reference materials that
• Full brochures
• Direct marketing to reinforce
•
company commitment
• Paycheck inserts
• Details on employee
premium amounts
•
•
•
•
are easy to distribute
Flyers with key HSA
information (i.e., Qualified
Medical Expenses, overview
of how investment account
works, etc.)
Information Sessions with
Open Q&A
Program Web site
HSA & HDHP info; links to
tools and FAQs
Benefits hotline
• Schedule regular
communications with
accountholders.
• Some topic ideas:
— Investment reminders
— Contribution information
— Tips for using the HSA
ADDITIONAL INFORMATION
Provide external resources for
more detailed information on
HSAs for employees.
8
• Employer contribution
information
• Education on Investment
options of an HSA
• Potential fees to employees
Access interactive tools,
including plan comparison
information.
Employee Benefits Research Institute, Issue Brief 320 – 8/2008
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
7
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
HSA CASE STUDY #2
A technology company with more than 30,000
eligible employees worldwide promoted HSAs as
a long-term savings vehicle and an integral part
of employer-provided retirement benefits. HSAs
were offered along with three other traditional
healthcare options. The company provided
100% coverage for preventive care and
contributed 50% of the HSA’s deductible. As an
added incentive, the entire employer
contribution was funded in the first payroll
Decision-support tools
Real-life examples and hands-on tools are
of significant help to employees trying to
become better consumers of healthcare
benefits. These tools can be sourced from
both the firm’s health insurance provider
and/or the HSA administrator. The available
tools range from simple calculators to genuine
decision-support aids using actual data to help
demonstrate the advantages of an HSA for
any specific employee.
cycle. Employees could also receive additional
HSA contributions upon successful completion
of wellness activities.
The process for selecting an HSA administrator
included an extensive RFP process with finalist
meetings and presentations. Once a decision
was reached, the company worked with the new
Basic HSA savings calculators
An HSA savings calculator is an easy-to-use
quick reference tool that educates the
employee on basic HSA math, including:
• Estimating his/her annual HSA contribution
administrator to set project timelines and
• Adding catch-up contributions, if eligible
outline specific program requirements.
• Adding employer and/or incentive
A phased communication program was used to
introduce HSAs to employees. Information on
HSAs was communicated to employees via the
corporate intranet four months prior to their
enrollment period in conjunction with the
contributions, if eligible
• Knowing the annual contribution limits
• Estimating payroll deductions based on
the above
company’s 401(k) plan. The company worked
with J.P. Morgan to create an employee Web site
Tax calculator
for HSA education and health plan information.
This is an easy-to-use tool that estimates
the impact of HSA contributions on the
employee’s state and federal income taxes.
One month before enrollment, e-mails were sent
to all employees with HSA information and links
to educational materials, including video
tutorials. Employee meetings were conducted
nationwide by J.P. Morgan to provide subject
matter expertise (both one-on-one and smallgroup meetings). Additionally, employees had
access to custom plan selection tools and
savings calculators to help estimate total out-ofpocket costs across the plans.
Future HSA value calculator
Similar to retirement calculators, this tool
allows users to make contribution and
distribution assumptions as well as estimate
future HSA balances by incorporating time
horizons and estimated rates of return on
cash and/or investments over time.
Their well-organized and extensive employee
communication plan paid off. The company met
100% of its enrollment goal for year one. Going
forward, they plan to look to further integrate
their 401(k) plan and HSAs to provide
employees with a more holistic approach to
retirement savings.
Plan selection and cost
estimator tools
These detailed yet intuitive cost-modeling
and projection tools can help employees
understand and more confidently evaluate a
consumer-directed healthcare plan and taxpreferred accounts such as HSAs. These
tools perform a side-by-side comparison of
traditional medical plans with new HSA plans,
allowing employees to select with more
confidence. Although many comparison tools
are available, the more sophisticated ones
include the following features:
• Use of actual plan designs (e.g.,
deductible levels, coinsurance) offered
by the employer
• Integration of true cost data from the
health insurance company to help better
predict the costs of office visits,
procedures, chronic conditions,
medications and more. Administrators
can work directly with the insurance
company to obtain this data. The
information can help illustrate to
employees the effect that different types
of healthcare providers and services can
have on costs and HSA balances and what
their costs are over time.
When evaluating a custom tool, employers
need to look carefully at the tool’s capabilities
to combine cost estimation, plan selection and
long-term HSA accumulation modeling.
After the enrollment period, an effective way
to reinforce a company’s ongoing
commitment to its HSA program is to provide
employees with regular communications that
highlight product features and regulatory
impacts and also encourage account usage.
Conclusion
HSAs continue to grow in popularity. In
combination with HDHPs, they have become
a viable alternative to traditional health
insurance options. Successful programs
provide good features, great service and
an experienced, knowledgeable partner
to help employers engage and educate
their workforce.
Many clients have found that the key to
success in HSA implementation and
administration is to carefully consider a
range of new concepts and ideas, including
those we have presented in this paper:
• Best Practices for Designing a Program
to meet your short- and long-term
enrollment goals
• Best Practices for Selecting an HSA
Administrator with the requisite expertise
and core capabilities to meet your
firm’s and employees’ needs
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
8
BEST PRACTICES FOR IMPLEMENTING A HEALTH SAVINGS ACCOUNT (HSA) PROGRAM
• Best Practices for Effectively
Communicating the benefits of an
HSA to your employees
Lessons learned in these areas have yielded
successful programs for thousands of
J.P. Morgan clients. Considering these options
can help ensure that your firm’s benefit
offering is competitive in the marketplace,
while providing the best value for both your
employees and your company.
About the Authors
About J.P. Morgan
Healthcare Solutions
J.P. Morgan Healthcare Solutions provides
a comprehensive suite of products, services
and financial settlement tools for consumers,
insurers, physicians, hospitals and other
healthcare providers through two core
businesses, Consumer-Directed Healthcare
and Business-to-Business Solutions.
J.P. Morgan Healthcare Solutions is part of
the firm’s Treasury Services business.
David Josephs
Treasury Services
Managing Director and Head of ConsumerDirected Healthcare
The Treasury Services business of J.P. Morgan
is a top-ranked, full-service provider of
innovative payment, collection, liquidity
and investment management, trade finance,
commercial card and information solutions
to corporations, financial services institutions,
middle market companies, small businesses,
governments and municipalities worldwide.
With more than 50,000 clients and a
presence in 39 countries, J.P. Morgan
Treasury Services is the world’s largest
provider of treasury management services
and is a division of J.P. Morgan Bank, N.A.,
member FDIC.
David has worked on J.P. Morgan’s CDH and
HSA programs from their inception. His
experience prior to joining the bank includes
working directly for health insurers as well as
for nearly 10 years as a management
consultant to health plans and healthcare
providers on strategy, operations and revenue
cycle challenges. David served five years in
Washington D.C. as a legislative assistant to a
member of Congress and U.S. Senator,
handling healthcare issues. David earned a
B.A. in History from Wesleyan University and
an MBA from the Kellogg Graduate School of
Management at Northwestern University.
For information on HSAs, and to learn
Jason Kessler
more about J.P. Morgan’s best practices in
Vice President, HSA Product Manager
administering HSA programs, please visit
Jason has an extensive background in
healthcare product management, HSA
program design and all aspects of building
the necessary infrastructure to help
employers and employees navigate today’s
complex healthcare market. Jason spent the
previous 10 years working for leading health
insurance companies and HSA administrators.
He holds a B.A. from the University at Buffalo
and an MBA from the Lubin School of Business
at Pace University.
jpmorgan.com/visit/hsa, or contact Jason
Kessler at jason.b.kessler@jpmchase.com,
or your J.P. Morgan Treasury Services
representative.
©2009 JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms.
9
