Look inside for:

> Tips on how to start theHSA conversation

> Strategies for pitching and sellingthe investor-focused HSA

> Comprehensive educationalresources to use with clients

> And much more

HealthSavings

For more information, please contact Erik Eckard at (804) 419-9898 or email him at Erik.Eckard@HealthSavings.com

A GUIDE TO SELLING YOUR

HSA Program

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Start HereThis reference book will guide you through selling a health savings account (HSA) program. Each section has a specific focus. Depending upon your immediate need, and your experience with HSAs, you can quickly navigate to the section that is most useful in the moment.

Feel free to use the resources throughout this guidebook to help explain HSAs to Plan Sponsors and Participants.

Sales Strategies ...... . . . . . . . . . . . . . . . . . . . . . . . . 12Find the Right Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Reach Out to Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The Pitch ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Understand the Basics: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

How an HSA Works, HSA Eligibility, Contributions, Distributions and Tax Reporting

Highlight Accountholder Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Highlight Plan Sponsor Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Customize Your Pitch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The HealthSavings HSA Difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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HSAs can be much more than a medical tax shelter. In their most productive form, they become part of a comprehensive retirement strategy. But there are often misconceptions and a general lack of understanding around HSAs.

Even though some 25 million Americans have HSAs, according to recent research by Devenir, they are still not commonplace. So there’s just as much potential for growth as there is need for education—which you are in an ideal position to provide.

Use the resources in this section to brush up on HSA basics, craft your pitch, and articulate the value HSAs offer.

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While it’s not necessary to become fluent in HSAs (that’s why we’re here), you want to feel confident answering clients’ basic questions about how HSAs work and how they fit into a retirement strategy.

Use these resources to help answer Plan Sponsors’ and Participants’ frequently asked questions.

Understand the Basics

How HSAs Work

Video InfographicReal Talk: HSAs Managing Common Misconceptions

HealthSavings.com/ video-resources

How an HSA Works

HealthSavings.com/ hsa-works-infographic

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ELIGIBILITY

CONTRIBUTIONS

DISTRIBUTIONS

TAX REPORTING

Video

Video

Video

Video

Interactive Tool

Eligibility

HealthSavings.com/ video-resources

Contributing to your HSA

HealthSavings.com/video-resources

Paying for Eligible Expenses

HealthSavings.com/video-resources

Tax Time

HealthSavings.com/video-resources

Eligibility Quiz

HealthSavings.com/eligibility-quiz

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HSAs are powerful savings vehicles that allow Participants to save for current and future medical expenses. For those who are eligible, HSAs are one of the most flexible tools on the market. Here are talking points on ten reasons why:

Highlight Accountholder Benefits

HSAs are available to anyone with a qualifying consumer-directed insurance plan. These are typically low-premium plans with high deductibles. In 2019, an individual under self-only health coverage can contribute $3,500 to their HSA and an individual under family coverage can contribute $7,000.

HSAs offer more tax benefits than any savings vehicle on the market. Contributions are tax deductible for Participants. Earnings and interest grow tax-free. And withdrawals for eligible medical expenses are tax-free, too.

HSAs are individually owned. So if you leave your employer, retire, or move, your account—and all the money in it—stays with you.

You can invest your HSA funds. And since the funds roll over year after year, and you can postpone reimbursing yourself indefinitely, HSAs can grow to become sizeable nest eggs.

You get to select which HSA provider to use. You don’t have to go with the one your employer chooses if you don’t want to.

If you do contribute through your employer, you can change your contribution amount as often as your employer allows, even without a qualifying event. Note: Employers are required to allow you to make changes at least quarterly.

Your HSA funds can always be used to pay for eligible medical expenses—for you, your spouse, and your tax dependents. Even if they’re on different health insurance and are not eligible to have their own HSA.

Even if you become ineligible to contribute to your HSA, you can continue to pay medical expenses tax-free from the funds currently in your account.

The 20% penalty for using your HSA for non-eligible expenses is lifted at age 65. At that point, you just have to pay ordinary income tax on withdrawals for non-eligible expenses, making your HSA a lot like a regular retirement fund.

You can reimburse yourself for eligible expenses later—even years down the road. Check out the video titled “Think Inside the (Shoe)Box” on the next page for a quick primer on how this works.

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Brochure

Guide Guide

The Benefits of HSAs

HealthSavings.com/ video-resources

Think Inside the (Shoe)Box

HealthSavings.com/ video-resources

Accountholder Benefits

HealthSavings.com/ benefits-hsa

Investing in a Healthy Future Has Never Been So Easy

HealthSavings.com/GeneralInfo

The Ultimate Guide to HSAs

HealthSavings.com/ hsa-ultimate-guide

The Ultimate Guide to Investing Your HSA

HealthSavings.com/ hsa-investing-guide

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As great as HSAs can be for Participants, there are important benefits for Plan Sponsors as well. First and foremost, your clients—both Plan Sponsors and Participants—can benefit from making pre-tax payroll contributions to an HSA.

• A strong HSA program− expecially one with investment options and first-dollar investing− can be used as a recruitment and retention tool.

• A retirement savings focus complements financial wellness incentives.

• HSAs encourage employees to become better cost-conscious consumers of healthcare. And an increase in consumer involvement results in lower annual premium increases.

Beyond FICA savings, there are other important benefits to note for Plan Sponsors:

Infographic

Plan Sponsor Benefits

HealthSavings.com/ benefits-employer

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Key Points by Audience

Addressing the needs of the three key customers—the C-suite, HR, and the Participant—is key to successful HSA adoption. Here are some talking points geared toward each audience.

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Customize Your Pitch

• HSA-qualified plans mean lower insurance premiums.

• Employee contributions equal FICA reductions for the employer and the employees.

• Increased consumerism equals smaller annual healthcare cost increases.

• First-dollar investing gives all employees an opportunity to save and invest.

• The funding process is similar to the 401(k) funding process.

• Investment options can be used as a recruitment and retention tool and are particularly attractive to millennials.

• Retirement focus complements financial wellness initiatives.

• Employees can see the debit card balance and investments in one place.

• First-dollar investing lets employees maximize their money from day one.

• Easy access to investments is attractive to Highly Compensated Employees (HCEs).

• Tying the HSA into the retirement discussion helps employees plan for their two biggest fears (Retirement Savings and Healthcare Expenses) at the same time.

• There is no minimum balance required.

• There are no investment transaction fees.

• Up to two free debit cards (optional) are included that can be used to pay eligible medical expenses.

• Transferring funds between cash and investments can be done with one login.

Cost containment, tax savings

Ease of implementation, recruitment

Ease of use

CEO/CFO

Human Resources

Participants

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Also, among Participants, the attraction to HSAs varies based on age and financial ability.

Key Points by Age & Stage

• They can save money on their health insurance premiums.

• The HSA-qualified plan caps out-of-pocket expenses, while PPOs include cost-sharing at very high levels.

• In the worst-case scenario, many younger employees will end up spending what they would with the traditional PPO. But in a healthy year (any many younger employees are relatively healthy), they’ll be able to pocket and invest those dollars.

• The ability to increase their HSA contributions with catch-up contributions is important.

• IRS regulations allow the tax-free inheritance of the HSA to the spouse.

• There are no required minimum distributions, unlike an IRA.

• HSA dollars are available to pay long-term care premiums and Medicare parts B and D.

• There are no penalties for non-qualified withdrawals after age 65. Withdrawals are subject only to normal income taxes.

• Employer contributions to the HSA are viewed as an additional benefit from the employer.

• The investment opportunity is appealing, and the opportunity to invest is great, especially given the length of time until retirement.

• While HSAs are attractive to many consumers, they are especially appealing to those who recognize they rarely access the insurance benefit.

• There is no need to itemize to get the tax savings.

For younger employees, HSAs are attractive for different reasons:For those employees near retirement:

EMPLOYEES:

Guide Guide

Make HSAs Relevant to Millennials

HealthSavings.com/hsas-millennial

The Complete Guide to HSAs and Medicare

HealthSavings.com/hsas-medicare

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The HealthSavings HSA DifferenceMaybe your client has bought into the benefits of offering an HSA. But they might want to know why a HealthSavings HSA program is their best bet. Here are some talking points and resources to help with that conversation.

HealthSavings helps Plan Sponsors and Participants think about HSAs as a long-term retirement solution. Many competing HSAs are provided by banks. Their focus is developing an easy-to-use transaction account. Because the bank business model generates most of its revenue from the interest spread (200–250 basis points on deposits, on average) and charges on debit card transactions (interchange fees) there is very little incentive to encourage investing the HSA balance. HealthSavings is different. They make it easy for Participants to accumulate and invest their funds for the future. At the same time, their platform offers debit card integration for those Participants wishing to access funds for more immediate qualified medical expenses.

HealthSavings offers tools to help Participants maximize their HSA as part of a retirement strategy—in addition to a short-term medical savings strategy. HealthSavings offers first-dollar investing in a robust selection of low-cost, institutional-class fund options. Plus, there are no additional fees to access the investment option. And advisors can customize the fund lineups Participants see to remove the guesswork.

Advisors can help manage Participants’ investments As with any retirement savings vehicle, employees deserve guidance. HealthSavings’ platform makes it easy for advisors to manage employees’ investments, the same way they manage investments in traditional retirement accounts. Advisors can serve as the one-stop-shop for retirement investment guidance.

HealthSavings has a proven track record in the medical savings space. The company started as a medical savings account (MSA) adminis-trator in 1996. After the legislation enacting health savings accounts (HSAs) passed in January 2004, the organization turned its focus to HSAs. Today, they work exclusively with HSAs, helping clients in all 50 states take responsibility for their health and financial futures through education and investment-focused products and services.

HealthSavings is a Top 10 HSA provider nationally. HealthSavings can work with all insurers, and places focus squarely on investment HSAs. As a result, HealthSavings sits in the top 1% of HSA companies nationwide and administers more than $850 million dollars in investments.

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Over the years, HealthSavings has been referred to as

“The Investor-Focused HSA” 5xHealthSavings’ balances are

Than the national average.

HIGHER

It has also been nationally recognized as one of the best values in HSAs in Forbes, Money magazine, the Wall Street Journal, Kiplinger’s and Reuters as well as various online publications, including 20 Something Finance, Investment News, Market Watch and others.

Our accountholders have an average balance of over $10,000, while the industry average is just over $2,000, supporting our belief that if you tell the story differently, you get a different result. That’s proof that its customers understand the long-term value of HSAs.

Brochure

Do Your Employees Know About HSAs?

HealthSavings.com/ DoEmployeesKnow

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Why HealthSavings?

HealthSavings.com/ video-resources

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Armed with the resources and knowledge you need to pitch an HSA program, it’s time to kick off the conversation with your clients.

This chapter includes resources you can use to identify potential clients, break the ice, and eventually pitch an investment-focused HSA.

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Your clients deserve your HSA. You choose the funds and how to be compensated. We create your custom investment HSA and handle administration, recordkeeping, education, service and more. Now you can offer HSA investment management services to the same clients who know and trust you for other services, like 401(k)s, 403(b)s, IRAs, etc.

So which clients should you start with? If you answer “yes” to the questions below for a specific client, you can be assured that client is a good candidate for an investment HSA.

Currently offer employees an HSA? If yes, then you should ask if there is an investment option. Most likely, their HSA is provided by a bank that may or may not have an investment offering. Banks make 200–250 basis points on those deposits on average, so there is little incentive for them to encourage investing of the HSA.

Have an HSA-qualified high deductible health plan, or are they considering one? 85% of employers already offer a HSA-qualified plan, but ever-increasing health care expenses are forcing more employers to move that way each day. By switching to a consumer-driven health plan, the employer can reduce the rate of increase in future premiums. In the end, both the employer and the employees benefit.

Offer employees a rich benefits package? The fact that an employer offers a rich benefits package can be seen as a double opportunity. They already want to care for the employees. By switching to an HSA-qualified plan, the employer can reduce insurance premium costs for both the employee and the employer and provide incentives for employees to become better consumers. Additionally, some of those savings can be given to the employees in the form of an HSA contribution.

Have employees who are worried about healthcare expenses−both today and for the future? They should. A recent Scottrade study indicated healthcare costs were the number one reason to delay retirement. And employees will admit that they are not prepared to absorb a significant healthcare expense.

Find the Right Clients

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Does your client:

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You’ve identified clients that could benefit from your investment-focused HSA. Next, dig a little deeper. A little knowledge of the current environment can pay big dividends, and it also gets the conversation started. The questions below will help you understand the availability of the required health insurance and the Plan Sponsors’ commitment to the HSA as a cost containment and retirement readiness tool.

Most banks require a set amount to be maintained in the checking account prior to having access to an investment option. Occasionally, the administration fee will be waived if the checking account balance is above a set limit. This required balance can be as much as $5,000. For the employee who can invest their HSA dollars, this represents a huge opportunity cost. Forgoing a modest 3% return represents an annual cost of $150.

How many employees are covered on the HSA-qualified health plan? How many currently participate in the HSA? This will give you a clue as to the scope of potential HSA Participants. If the HSA is new to this Plan Sponsor, you may see 30–40% of employees switch in the first year.

How many health insurance plans are offered? The greater the number of insurance offerings, the more likely there is a bias toward the traditional insurance coverage and lower participation in the HSA. However, other factors can sometimes offset that issue. With multiple insurance plans being offered, HSA participation can cap out at around 50–60%. The good news: more employers have a long-term goal of making the HSA qualified plan the only plan.

If more than one plan is offered, it is important to look at the Plan Sponsor’s subsidy of the premium. By subsidizing the HSA-qualified plan, and contributing to the HSA, the employer can provide a strong incentive to choose and fund the HSA. Note that many of the Participants seeking the lowest cost can be more “spenders” than “savers.” So education becomes even more important to this group.

Does the Plan Sponsor offer a Section 125 Plan? This allows Participants to make painless pre-tax contributions via payroll deduction and save FICA.

Is the Plan Sponsor contributing to or open to contributing to, Participants’ HSAs? Nationwide, the average contribution hovers around $1,800 per year, according to data from the Employee Benefits Research Institute (EBRI). Studies also indicate that employer contributions result in greater HSA adoption. And greater adoption means more contributions from employees, which saves the em-ployer even more in FICA taxes.

Does the Plan Sponsor pay the HSA administrative fees? Both an employer contribution and the payment of the administrative fees boost HSA enrollment. And the Plan Sponsor wins, too. The Plan Sponsor saves the FICA on all of those Participant contributions through the Section 125 plan.

Does the Plan Sponsor currently have an HSA? FSA participation makes one ineligible for contributing to an HSA. But “Limited” FSAs are allowable. They pay only for Vison and Dental and do not prohibit Participants from making HSA contributions.

Does the Plan Sponsor’s current HSA (if applicable) have an investment option?

Only 7% of HSA providers offer a mutual fund or self-directed brokerage option.

Reach Out to Clients

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For more information, please contact Erik Eckard at (804) 419-9898 or email him at Erik.Eckard@HealthSavings.com

A Guide to Selling Your HealthSavings™ HSA ProgramHealthSavings™ is a trademark of HealthSavings Administrators