How Well Do Business Owners Understand HSAs?


Only one in five business owners fully understand important elements of health savings accounts (HSAs), according to a new survey from the Nationwide Retirement Institute.

According to a recent article in Benefits Pro, Nationwide surveyed 406 business owners with 11 to 500 employees in February 2019 and found that 41 percent offer their employees an HSA. Another 21 percent are considering an HSA, while 38 percent state they are not considering an HSA.

Millennial business owners are leading the way with HSA adoption.

According to the survey, 81 percent of Millennial business owners offer an HSA option, compared to 44 percent of Gen X and 25 percent of Baby Boomer-owned businesses. The larger the business, the more likely it is to offer an HSA.

The survey also found that many of the business owners had misconceptions about the benefits of an HSA and misunderstandings on how they operate. Among those surveyed, many didn’t understand that it’s necessary to provide a high-deductible health plan (HDHP) when offering an HSA, that employers can contribute to employee plans, and HSA balances carry over year-to-year.

Nationwide asked survey respondents about the benefits of an HSA. Business owners who already offer an HSA reported that the main benefits are providing tax advantages (56 percent) and the ability to cover health-care deductibles and out-of-pocket expenses (58 percent). Less than half said saving for retirement is an advantage associated with HSAs. In addition to misconceptions about the benefits, a gap exists in understanding that you must provide an HDHP to offer an HSA.

According to the survey, 6 percent of business owners with 101 to 500 employees answered that they offered an HSA despite indicating they did not offer an HDHP option, which would not be possible.

The survey finds that Millennial business owners possess the most solid knowledge about the important elements of HSAs, in addition to how HSAs can be advantageous for them and their businesses. However, only 31 percent of Millennial business owners knew that HSA balances carry over year-to-year.

Lori Joint is vice president at the Manufacturer & Business Association (MBA) and oversees Insurance Services for MBA member companies. Contact her at 814/833-3200, 800/815-2660 or