HSA Triple Tax Benefit and Costs Defrayed by Employer Contribution

At the conclusion of The Plan Sponsor University (TPSU) Program at University of California Berkeley, Fred Barstein, Founder and CEO of TPSU, interviewed Ms. Carrie Hildebrand of Sterling Administration. Ms. Hildebrand is a Human Resources Generalist and she works with many of the company’s employees on the company benefit plans, including the 401k Plan and the Health Savings Accounts.

Health and Retirement benefits are front-and-center at this firm with 85 employees.  As required for the Health Savings Account, the company offers a High-deductible health-care benefit, the cost of which is defrayed by an Employer Contribution to the plan.  This enables more employees to take advantage of the Triple Tax Benefit and flexibility of the HSA.

As the result of the TPSU Program, Ms. Hildebrand plans to revise how her firm looks at Employee Communications for the 401k Plan of Sterling Administration. Participant Education will be updated and they will give strong consideration to one-on-one meetings with each participant.  She wants to make certain that the company receives maximum benefit for the plan and all contributions.

Full Transcript Here

Fred B.:            Fred Barstein with 401KTV at the beautiful UC Berkeley Campus where we just completed a TPSU program and I’m here with Carrie. Carrie welcome.

Carrie H.:          Thank you.

Fred B.:            Okay if we ask you a few questions?

Carrie H.:          Sure.

Fred B.:            Thank you. So, before we do, tell us a little bit about yourself and how many employees, your company, and how many employees you have.

Carrie H.:          So, I am the Human Resources Generalist for [Sterling 00:00:32] Administration which is a TPA. We administer HSA, FSA, and Cobra Benefits amongst others that fall in that field. We have about 85 employees and I administer our 401K plan for our 85 employees.

Fred B.:            And the name of your company is again?

Carrie H.:          Sterling Administration.

Fred B.:            In the Bay Area?

Carrie H.:          In the Bay Area here, we’re located in Oakland.

Fred B.:            In Oakland. Sterling Administration. Great, well thank you. So the question we want to ask is about HSAs, right?

Carrie H.:          Sure.

Fred B.:            Now, does your company offer an HSA?

Carrie H.:          We do offer an HSA. You of course have to have the high-deductible medical plan in order to qualify for the HSA and then we do employer contributions as well as employee-

Fred B.:            You match it?

Carrie H.:          Yeah.

Fred B.:            So was there initial resistance to doing the HSA and how long have you had it?

Carrie H.:          I wouldn’t say there was initial resistance, just because our company started as an HSA only company.

Fred B.:            Oh, there you go.

Carrie H.:          So, our CEO of course, we are big proponents for the HSA.

Fred B.:            Yeah.

Carrie H.:          But, we’ve had resistance from people coming into our company and maybe wanted to switch to a medical plan that’s a little more appealing.

Fred B.:            I see. Yeah.

Carrie H.:          Yeah.

Fred B.:            Right, because some companies want to subsidize the cost versus a high deductible.

Carrie H.:          Yeah.

Fred B.:            So how’s it working? How does your employees like your HSA?

Carrie H.:          It’s great. Initially when we get some new hires, we do get some pushback on the high deductible plan.

Fred B.:            Yeah.

Carrie H.:          But the fact that we give an employer contribution without-

Fred B.:            Right.

Carrie H.:          … the employee having to contribute themselves-

Fred B.:            Right.

Carrie H.:          …to help with that high deductible cost, definitely changes their view of that plan.

Fred B.:            Right.

Carrie H.:          And so it’s working out really well and we have really great participation in it. Not just from people who want to get the employer only contribution, but we do have people who are contributing.

Fred B.:            Right.

Carrie H.:          And I would say a good range of them are contributing and saving rather than using in real time.

Fred B.:            Waiting. Right. Because it’s a triple tax benefit.

Carrie H.:          Correct.

Fred B.:            Great. So final question, Carrie. Couple of things you picked up that you want to take back that you learned here?

Carrie H.:          Sure, I learned a lot about what companies around my size are doing.

Fred B.:            Yeah.

Carrie H.:          To make the administration of their 401K more appealing to their employees.

Fred B.:            What are they doing?

Carrie H.:          They’re doing many education meetings, not just the one time a year open enrollment type meeting. They’re doing one-on-ones with their advisors, their employees.

Fred B.:            Right.

Carrie H.:          And then I would say also I took away just a better understanding of as a plan administrator, how we can work better with our employees-

Fred B.:            Right.

Carrie H.:          … to educate them in a way and giving us that language to educate our employees in a more helpful manner.

Fred B.:            Very good. Well thanks for your time, today.

Carrie H.:          Thank you.

Fred B.:            And thank you for watching 401KTV stay tuned.

 

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