Client Service February 21, 2018

Concerns About Retirement Health Care Costs Increasing Interest in HSAs

However, only 8% of respondent to a ConnectYourCare survey are seeking advice about how much to contribute to a tax-advantaged health savings account.

Reported by

ConnectYourCare’s 2018 report on consumer-driven health care account trends finds 44.9% of respondents chose to enroll in a health savings account (HSA) as a savings vehicle for future health care needs, over more immediate benefits like tax savings and lower premiums, up from 40.5% in its 2017 report.

The majority of HSA account holders are spenders, both by their self-evaluation and backed up by spending and balance data. However, 44% of account holders saved at least half of their contributions in 2017, which may indicate a future shift in saver/spender trends.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Twenty-two percent of respondents overall say that paying for health care in retirement is the health care issue that concerns them most. However, when segmented by age, this rises to the top issue causing concern for those ages 55 to 64 (37.4%) and those age 65 and older (30.9%). Those younger than 25 are most concerned about unanticipated health care expenses and those ages 25 to 54 are most concerned about increasing insurance premiums.

While paying for health care costs in retirement does not top the list of health care concerns overall, this financial burden holds prominence among employees’ concerns for the future when compared to lifestyle expenses. Among those surveyed, 68.7% are more concerned about paying for insurance premiums and other medical expenses than they are about paying for lifestyle items like vehicles and housing in retirement. This is up from 63% last year.

Leveraging HSA investments can have a dramatic impact on HSA growth. However, ConnectYourCare found most respondents are not investing their funds, and among those who are, 62.9% plan to withdraw funds from time to time for medical expenses rather than grow their funds for future health care needs in retirement (17.7%).

When determining how much to save in a tax-advantage medical spending account, including HSAs, flexible spending accounts (FSAs) and health reimbursement accounts (HRAs), 55.5% say it is most useful to review their previous spending habits, while 23.9% saying seeing potential savings/spending scenarios for someone like them is most useful, and only 8% cite seeking advice from friends, family members or financial advisers as most useful.

The full report may be downloaded from here.
Products February 21, 2018

BofA Merrill Lynch Participant Website Relaunch Reflects Wellness Trends

The redesigned plan participant portal is based on insights gained from working with more than 5 million workers across the U.S., according to the firm.

Reported by

Bank of America Merrill Lynch launched a redesigned Benefits OnLine homepage to help plan participants advance their financial wellness and better navigate the wide range of financial stressors impacting employees today.

The new website will present employees with “a more simplified and interactive experience,” the firm says, while featuring data-driven recommendations.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The enhancements follow findings from Merrill Lynch’s 2017 Workplace Benefits Report demonstrating financial stress in the workplace is significantly impacting focus and productivity at work. The research shows employees spend a median of two hours a week, or 100 hours a year, taking care of finances while on the job and emphasizes the powerful role employers can play in helping employees navigate financial concerns and pursue their financial goals.

One dichotomy the survey found is that, while many employees are financially stressed, 87% are optimistic about their financial future. The top three reasons for this optimism are living within their means (51%), being in good health (49%) and having a well-paying job (45%). However, even optimistic employees have concerns. Among all employees, the top concern is running out of money in retirement, cited by 64%. The next concern is having to work longer than they had hoped for, cited by 61% of women and 51% of men. That is followed by not being able to work due to a serious illness (58% of women and 52% of men), not being able to pay for a child’s education (57% of women and 52% of men) and losing their job (45% of women and 46% of men).

Aimed at addressing these concerns, features of the redesigned participant homepage include a reimagined retirement income projection tool for plans with “Advice Access,” offering an interactive display of monthly and annual retirement income that a plan participant is projected to achieve.

Plain language and personal messaging to help participants better understand financial information, the firm says, while an expanded “My To Do List” features up to five recommended actions to improve participant plan behaviors and financial wellness.

«