We break down how High Deductible Health Plans, Health Savings Accounts, and TempoPay can work together to help employees pay for care and protect their finances.

A (really) quick dip into HDHPs and HSAs

High Deductible Health Plans were developed to encourage employees to make value-based healthcare choices and choose more wisely with their healthcare dollars. In exchange for a lower premium, they would have to meet a higher deductible before their insurance fully kicks in.

Meanwhile, the Health Savings Account (HSA) was created to reduce the increased cost burden associated with the High Deductible Health Plan (HDHP). Members enrolled in an HSA-eligible HDHP can save tax-free money for health care expenses in their HSA account.

Last year, almost one out of four adults reported having a major, unexpected medical expense with a median cost between $1,000–$2,000. This year, the minimum individual deductible for an HDHP is $1,500 with the maximum a member might pay is $7,500.

Can your employees afford the deductible on their High Deductible Health Plan?

Employees who signed up for an HDHP may have a lower monthly contribution, but how will they pay the deductible before their insurance kicks in? Considering that 57% of adults report not having $1,000 in savings to pay for an emergency expense, many often struggle to afford healthcare bills.

Many employees lack education on how to use an HDHP and HSA for their financial benefit. In a recent national survey on HSA enrollment and utilization, 1/3 of adults enrolled in an HDHP were not enrolled in an HSA. For those who did enroll, many had not funded the account citing a lack of knowledge on how it works.

Employees can struggle to navigate their insurance plans and provider networks which deters them from getting the best value out of their healthcare experience. Studies have also shown that employees enrolled in an HDHP are more likely to avoid care because they fear hidden costs.

Employees need help paying for healthcare

There’s a widening gap between employer health plan coverage and employee out-of-pocket healthcare spending.

This puts budget-conscious employers in a difficult spot as they balance the options of shifting increasing plan costs to their employees or doing nothing at all. They might consider contributing money to employees’ HSA accounts, but it's not a solution that helps everyone.

Meanwhile, employees with access to an HSA can contribute to the account each paycheck. But it still may not have enough funds to cover unplanned medical expenses, leaving them to pay out-of-pocket or avoid the care entirely, leading to more costly care later on.

With the availability of TempoPay’s interest-free financing solution, employers can maximize their internal resources to provide employees immediate access to funds at no extra cost to the employee.

• Employers do not assume the risk for unpaid balances, have no additional administrative burden, and can provide more employees access to capital for a better value.

• Employees can choose how they want to repay the balance and at what cadence– giving them precious time to adjust budgets to better prepare for the expense.

How do TempoPay and an HSA work together?

There's a window of opportunity to work within the system that employers and employees have today. TempoPay is a productive complement to an HSA account.

1. Pay for care immediately, and repay with an HSA.

   Employees who didn’t fund their HSA in time for an unexpected expense can use TempoPay to pay for the care they need sooner and choose to repay with their HSA later.

2. No-cost, everyday spending account.

   Employees can continue to contribute to their HSA and take advantage of the tax savings while TempoPay is their no-cost emergency and everyday medical expense account.

Taxed-deferred growth for the future

Why might employees consider leaving HSA dollars where they are? A healthy 65-year-old couple who retired in 2021, can expect total costs for insurance premiums and out-of-pocket expenses to exceed $650,000 through retirement. Based on history, healthcare expenses inflate at 2-2.5X the rate of U.S. inflation.

HSAs have a triple tax advantage for participants: contributions are not taxed, earnings are not taxed, and qualified expenses are not taxed.

Money in an HSA account stays with the account holder, and after retirement is still considered tax-free if used for qualified medical expenses. With medical expenses covered through TempoPay, employees at all income levels begin to have the capacity to maximize their HSA as a retirement investment vehicle.

What about the High Deductible Health Plan?

All of these savings are great if employees feel confident enrolling in an HDHP to utilize the HSA account. By eliminating deductible apprehension, employers can begin migrating their employees to HDHPs and other alternative plan designs with equity and affordability in mind. Employers can set the account limits accordingly to provide employees with the financial security of knowing they can cover their deductible.