Voya Financial has launched a digital health savings account assistant designed to help employees make better decisions when contributing funds for future use.
Only 41% of Americans would be able to cover an unexpected $1,000 expense, according to data from Bankrate. As a result, 32% of hardship withdrawals out of retirement plans are the result of unreimbursed medical expenses, according to Voya’s hardship withdrawal data analysis.
But withdrawing money from retirement savings can have punishing financial consequences, like penalties and fees, and reduce retirement savings in the long term.
In an effort to help employees avoid this course of action, Voya is launching myHealthMoney, an online tool designed to make health care savings decisions easier by providing a suggested amount to contribute to their Voya HSA. HSAs allow employees to allocate pre-tax dollars to help cover medical costs, with funds rolling over year to year.
“There’s been this continual shift of responsibility in decision making that’s been pushed to the employee [from the employer],” says Rob Grubka, president of Voya’s Employee Benefits business. “We’ve been looking at both sides and seeing what a challenge it already is for retirement, and then [there’s the] challenge that comes from medical costs. Then you throw a pandemic in the mix — how do you help people make better decisions?”
As healthcare costs continue to grow, high deductible health plans are becoming an appealing choice for employers because they are often combined with an HSA. Indeed, 46% of employees with private health insurance are enrolled in a HDHP, according to data from the Employee Benefit Research Institute.
But many employees struggle with knowing how much they should be contributing, says Nate Black, assistant vice president of health savings and spending accounts at Voya.
“We saw a really pressing need both on the benefits side and on the retirement side for additional support dealing with medical expenses,” he says. “We see roughly one third of hardships from our retirement plans are due to emergency medical expenses.”
The majority of those individuals have insurance, Black says, but because of the deductible and the cost sharing, they may not be in a financial position to cover that cost.
Voya’s tool asks employees a series of questions about their full financial picture, including key household, salary, savings and medical costs, as well as employer information., The tool also evaluates the employee’s current and projected health care spending and tax savings, and takes into account an employee’s stated retirement goals when assessing their current and future spending needs in an effort to come up with a suggested HSA contribution amount.
“Healthcare decisions are among the most challenging for employees. Not only are these decisions dependent on today’s complex financial situation, but they will also have a long-term impact on other important financial goals — especially retirement,” says Gina Mourtzinou, CEO of SAVVI Financial, a technology-enabled financial wellness platform powering the Voya HSA tool. “We created the myHealthMoney digital assistant so employees can finally gain clarity and confidence in their short- and long-term healthcare finance decisions.”
