What is a Health Savings Account (HSA)?
On the surface, a Health Savings Account (HSA) is an incredible tool for employees to save money for upcoming healthcare expenses. Anyone with a high-deductible health plan can use this triple-tax advantage plan to set aside and invest pre-tax dollars from their paychecks to cover a range of health care purchases.
HSAs offer tax-free contributions, earnings, and distributions and can roll over from year-to-year and job to job. Not to mention, they can be used on thousands of items at the HSA Store.
But did you know you can do so much more with your HSA?
You can also use your HSA to fund investments that can help you build your wealth over time. Let’s take a look at how to invest HSA funds, how these investments work, and the benefits they provide to your employees.
How do HSA investments work?
HSA investments allow employees to take the funds they have saved in their HSA and apply those funds to various investments. Traditionally, employees can choose how much they wish to invest and their investment agency or advisor can walk them through the best HSA investment account options for them depending on their desired level of risk.
This gives employees a long-term tool to maximize the everyday benefits of an HSA. HSA investments can be a great way to supplement income or build for retirement. The accelerated growth of your HSA investment funds can also be transferred back into your traditional HSA so you can cover current and future medical payments.
What makes the Clarity HSA Investment Experience Unique?
Every HSA investment may differ in the plans offered and investment options available. However, the Clarity HSA Investment Experience offers your employees an optimized and streamlined approach to determine the exact investment journey that is aligned with their individual needs.
With Clarity, your employees can choose from three uniquely customized investment models. This means that they have the freedom to control their investments with as little or as much involvement as they’re comfortable with. The three investment paths include:
- Managed–The “do-it-for-me” approach
Designed for novice investors who prefer to have the Clarity advisor tool automatically select and rebalance investments on an ongoing basis in accordance with their age and/or risk profile
- Self-Directed–In between “do-it-for-me” and DIY approaches
Designed for intermediate investors who have the desire to self-select from a menu of monitored investment options covering multiple asset classes to diversify their portfolio and then rebalance their portfolio manually.
- Brokerage– Totally hands-on DIY approach
Designed for adept investors who desire to perform advanced research and trading across hundreds of individual stocks and exchange-traded funds (ETFs) to build and manage their own investment portfolio.
Additionally, the Clarity Investment Experience offers the following convenient benefits:
- Quick and efficient account opening
With Clarity’s HSA investment tool, employees can open, fund, and start investing all in the same day. This offers your employees full transparency into their assets and allocations in real-time. Traditionally, other investment models have a long approval process that can take days to open an account. The Clarity Investment Experience cuts days out of the process so employees can get right to investing on their own terms.
- Easily accessible from one account
Once employees have funded their investments, they can enjoy the ease of managing their portfolios from the same account they already manage their HSA! Clarity tests and services 100% of the HSA experience to limit confusion and processing time. No additional login credentials are needed. No third-party verification. Just the Simply Smarter approach Clarity aims to achieve in all of their solutions.
Investment Best Practices to Keep in Mind
Before investing, employees should keep the following in mind:
- Employees must meet a minimal threshold before being able to invest.
- Investment funds can easily be transferred to and from your HSA at any time using the Clarity HSA dashboard.
- Need to switch between investment paths? No worries! Employees can change their investment model conveniently in their HSA dashboard.
- Want to maximize savings? Establish an Automated Investment Transfer to continually fund new investments from the employee’s HSA.
Making Investing Simple and Achievable
It’s easy to see why HSAs are so powerful. In addition to acting like a bank account that can be used to pay qualifying healthcare expenses like deductibles, co-pays, and prescription drugs, HSAs can also be building blocks for long-term investing.
The Clarity HSA experience is truly a one-of-kind solution within our benefits technology, customized to fit your employees’ needs. If you’re ready to include HSA Investments in your employee benefits package, contact us today. Clarity’s superior customer service and support can help you every step of the way.