For a 100-person company, that could mean up to $60,000 in annual savings for enhanced participation. Larger employers could achieve six-figure reductions in federal tax liability.

Beyond annual tax savings, an effective tax-advantaged benefit strategy also helps address long-term workforce challenges, such as delayed retirement, which can cost employers up to $50,000 per employee per year in wages and healthcare premiums.³ For larger organizations, this can translate into millions of dollars in avoidable costs over time.

This integrated strategy can also enhance employee financial wellness, reveal opportunities to streamline benefit administration, and help employers and employees extract more value from every dollar spent on benefits.

Delivering Integrated Benefit Strategy Differently

HSAs: The Triple-Tax Advantage That Boosts Retirement Readiness

HSAs have been around for years and are widely recognized by HR managers and employees. However, organizations often overlook the significant value HSAs deliver when their employees participate. Available to enrollees in a qualified high-deductible health plan (QHDHP), HSAs offer unique advantages, including:

• Tax-free contributions for both employers and plan participants (up to the annual limit).
• Tax-free investment growth and withdrawals for qualified medical expenses for the account holder.
• Greater after-tax spending power for participants who combine HSA and 401(k) retirement savings strategies vs. a 401(k)-only strategy.
• Expanded flexibility after age 65 when HSA funds can be used tax-free to reimburse medical expenses incurred in prior years, to pay for ongoing medical expenses, or withdrawn as cash and taxed as ordinary income, similar to assets in a 401(k) account.

For employers, the benefits go beyond supporting employee financial wellness. Every dollar contributed to an HSA reduces taxable payroll, lowering FICA obligations and creating direct cost savings. When participation increases, those savings compound — making HSAs not just a smart choice for employees, but a strategic advantage for employers.

A Smarter Blueprint for Employee Contributions

USI recommends a “next best dollar” approach to help employees prioritize contributions to available tax-advantaged accounts focused on maximizing retirement savings and reducing out-of-pocket costs. Employers can further drive engagement by shifting from seed contributions to an HSA match strategy. This approach encourages employee participation, increases savings, and supports the adoption of QHDHPs — delivering cost savings for both parties.⁵

Empower Employees and Strengthen Their Retirement Readiness

By offering the right mix of benefits — HSA match programs, automatic retirement plan enrollment and well-designed employee benefit offerings — employers can empower employees to save effectively and retire on time while optimizing the value of benefit spend. Financial education and easy-to-use benefit platforms also maximize impact. All these elements work together to drive participation, improve financial outcomes, and build a more engaged, productive workforce.