Beyond the 401(k): How Forward-Thinking Employers Are Building HSAs Into Their Retirement Plan Design

For years, employers have organized benefits around two separate ideas. 

The health plan helps employees manage medical costs today. The 401(k) plan helps them prepare for retirement tomorrow. 

Employees do not see their financial lives that way. 

They see one paycheck. From it, they are asked to cover a deductible, save for emergencies, contribute to retirement, and manage the many expenses that come with work and life. When these priorities compete, long-term savings can be the first thing to go. 

That is why more employers are looking at the benefits of the health savings account (HSA) holistically. 

That shift is already showing up in plan design. According to SHRM, 64% of organizations offered a high-deductible health plan paired with savings or a spending account, with 61% offering an HSA specifically.¹ The HSA is no longer just an enrollment-season line item. It is becoming a working part of how employers think about benefits. 

Offering an HSA can help strengthen the overall value of an organization’s benefits program by connecting healthcare coverage with employees’ long-term financial wellbeing. When paired with an HSA-qualified health plan, an HSA gives organizations a way to support employees with qualified healthcare expenses today while helping them build a dedicated, tax-advantaged resource for healthcare costs in retirement.  

The HSA’s Place in Retirement Readiness 

An HSA can give employers an opportunity to connect their healthcare and retirement benefits in a more meaningful way. Available to eligible individuals enrolled in an HSA-qualified high-deductible health plan (HDHP), an HSA is an employee-owned account that can receive contributions from the employee, employer or both. Because the account stays with the employee when they change jobs or leave the workforce, it can serve as a portable component of an organization’s total rewards strategy. 

For employers, the value of an HSA goes beyond offering another account. Thoughtful plan design, employer contributions, and clear education can help employees better manage qualified healthcare expenses today while building greater financial preparedness for the future. 

Its tax treatment is a key part of that value: 

• Contributions made through payroll may be pretax, while eligible individuals may be able to deduct contributions made outside of payroll. 
• Investment earnings can grow tax-free. 
• Withdrawals are tax-free when used for qualified medical expenses. 

That combination is often called the HSA’s triple tax advantage. It does not make the HSA a replacement for a 401(k) plan. Instead, it can complement an employer’s retirement-readiness strategy by helping employees prepare for healthcare expenses, which are likely to remain a meaningful cost in retirement.

The challenge for employers is that many employees never move beyond the account’s immediate use case. They contribute, spend the balance on current expenses, and repeat the cycle the following year. For employees managing a tight budget, that may be the right choice. However, those who can afford to pay some current expenses out of pocket may have an opportunity to preserve HSA dollars for future qualified medical costs and allow invested balances to grow over time. 

This is where the employer’s role becomes essential. The goal is not to push every employee toward the same savings behavior. It is to provide a plan design, contribution strategy, tools, and education that help employees understand their options and make informed decisions based on their individual financial circumstances. By positioning the HSA alongside the 401(k) plan rather than as a separate healthcare benefit, employers can help employees see how both accounts can support their overall financial wellbeing. 

Start With a Health Plan Employees Can Use 

The HSA conversation begins with the High-Deductible Health Plan (HDHP.) 

Employers need to ensure the plan meets HSA eligibility requirements. These requirements include minimum deductible levels and maximum limits on annual out-of-pocket expenses. 

The better question is whether employees understand how the plan works and feel equipped to use it. 

That means looking closely at the full employee experience: 

• How does the HDHP compare with other medical plan options? 
• Are employees clear about deductibles, preventive care, and out-of-pocket costs? 
• Does the plan encourage employees to make informed healthcare decisions? 
• Are there other benefit arrangements, such as a general-purpose flexible spending account, that could affect HSA eligibility? 
• Is there enough support to help employees feel prepared for a larger upfront expense if care is needed? 

When an HDHP is paired with clear education and meaningful employer funding, it can become more than a lower-premium plan option. It can be the foundation for a benefit strategy that supports both healthcare access and long-term financial wellbeing. 

Structure Employer Contributions with Purpose 

Employer contributions can help employees get started. They can also reduce some of the hesitation employees may feel about enrolling in an HDHP. 

For an employee who is concerned about a deductible, a company HSA contribution can make the plan feel more manageable from day one. For an employer, it creates a visible investment in employees’ current and future financial security. 

The most effective approach is not necessarily the largest contribution. It is a contribution strategy that fits the organization’s goals and works alongside the 401(k) plan match. 

For example, employers may consider: 

• Providing a base HSA contribution for all eligible employees 
• Offering different contribution amounts for self-only and family coverage 
• Funding contributions early in the year to help employees prepare for near-term expenses 
• Pairing HSA contributions with targeted reminders about 401(k) plan contributions, so employees see how the benefits work together 
• Reviewing the total rewards budget across healthcare and retirement instead of evaluating each program in isolation 

Employer HSA contributions, and employee contributions made through a cafeteria plan are generally excluded from employees’ taxable income and employment taxes, subject to applicable rules. That may create an additional efficiency for employers while helping employees direct more of their compensation toward qualified healthcare expenses. 

The key is coordination. Employees should not receive one message during benefits enrollment and a separate, unrelated message during retirement plan enrollment. They should understand how each choice fits into a larger financial picture. 

Help Employees Move Beyond Short-Term Spending 

Many employees use their HSA as intended: to pay for current qualified medical expenses. That is valuable. Yet many may not realize their HSA could also offer an opportunity to save and invest for future healthcare expenses. 

This is where plan design and communication need to work together. 

For employers, the goal is not to encourage a single savings behavior. It is to help ensure employees understand the choices available to them, including when it may make sense to use HSA funds now, maintain a cash balance, or consider investing funds intended for longer-term qualified healthcare expenses. Clear education can help employees make better use of a benefit the organization already offers. 

First, employers should review whether the HSA provider offers investment options and whether those options are accessible, reasonably priced, and easy to understand. If employees must keep a cash balance before they can invest, that threshold should be clearly explained. 

Then, employers should communicate the HSA in clear terms. 

Rather than telling employees to invest more, explain the choice: 

• Keep a cash balance for expected medical expenses and near-term needs 
• Consider investing funds that are not needed soon, and that the employee is comfortable leaving invested over time 
• Review contribution levels regularly as income, family needs, and healthcare costs change 
• Keep records of qualified medical expenses 

Employees do not need another generic financial wellbeing message. They need clear guidance that addresses their current pressures while showing them a path toward greater flexibility over time. 

HSA Strategy and Messaging for a Multi-Generational Workforce 

No two employees are the same. What makes an HSA valuable to a recent grad looks very different from what resonates with someone nearing retirement, so your plan and the messaging should reflect that range. 

Early-career employees may be focused on building a financial cushion and managing current expenses. For them, start with the basics: eligibility, payroll contributions, employer funding, and how HSA dollars can be used for qualified healthcare expenses. 

Mid-career employees may be balancing family healthcare costs, debt, and competing savings priorities. Show how regular contributions can create flexibility and how the HSA fits alongside emergency savings and 401(k) plan contributions. 

Pre-retirees may be especially interested in how an HSA can help address healthcare expenses in retirement. This audience may benefit from education on contribution limits, catch-up contributions for eligible individuals age 55 and older, investment options, and the importance of keeping documentation for qualified medical expenses. 

In every case, clear communication around the various benefits is better than broad encouragement.  

Common Plan Design Pitfalls 

Employers can offer an HSA without fully realizing its potential. Common gaps include: 

• Treating the HSA as an account, not a strategy. Employees receive enrollment information but no explanation of how the HSA supports financial wellbeing and retirement readiness. 
• Offering no employer contribution. Without an initial balance, employees may be less likely to engage, especially when they are concerned about the HDHP deductible. 
• Missing the investment conversation. Employees may not know investments are available or may not understand the tradeoffs between cash reserves and long-term investing. 
• Separating benefits and retirement communications. When the HSA appears only in healthcare enrollment materials, employees may never connect it to their retirement goals. 
• Using one-size-fits-all education. Employees need information that reflects their stage of life, financial priorities, and ability to save. 

The goal is not to make the program more complex, but to create a clearer experience that helps employees see how the HSA can support both today's healthcare needs and tomorrow's retirement goals. 

A More Connected Benefits Strategy 

Retirement readiness is not driven by a single account. It is shaped by the decisions employees make across healthcare, savings, debt, emergencies, and life changes. 
 
For employers, that means benefits cannot be designed or communicated in silos. A well-positioned HSA can help connect healthcare coverage, financial wellbeing, and retirement planning, giving employees more clarity about their choices and helping organizations deliver a more cohesive total rewards experience. 
 
Forward-thinking employers do not position the HSA and 401(k) plan as competing priorities. They help employees understand how each benefit can serve a distinct but connected role in their financial lives. A connected benefits strategy can also help strengthen employees’ sense of support and connection to their organization. In Franklin Templeton’s 2026 Voice of the American Workplace Study, 91% of employees said they actively want to learn more about their financial benefits, and 80% said they turn to their employers for help with financial worries.²  When employers make it easier to understand how healthcare and retirement benefits work together, they have an opportunity to turn a complex set of offerings into a more meaningful employee experience. 

For organizations focused on retention, that experience matters. Clear, relevant benefits education will not make retention automatic, but it can help build trust and demonstrate a tangible investment in employees’ financial wellbeing. The same study found that 89% of workers view a supportive environment as just as important as job security.²  Connecting the HSA and 401(k) conversation is one practical way to reinforce that support while helping employees see the value of the total rewards program throughout their careers. 

Interested in learning more about the value of an HSA? Explore Health Savings Accounts (HSAs) - Frequently Asked Questions by Employers. 

Investment advice offered through OneDigital Investment Advisors LLC. This article is for general informational purposes only and should not be considered tax, legal or investment advice.  

Sources: 

1. SHRM: 2025 Employee Benefits Survey
2. Franklin Templeton: 2026 Voice of the American Workplace