Health savings accounts have become a prime target for cyber criminals, who are using advanced tactics to steal funds from them, putting your employees’ medical expense savings at risk.
The risk is even greater considering that employees can keep HSAs for life and many of them are building wealth in these accounts to save for future medical costs in their retirement years.
As the popularity and value of HSAs grows, employers are in a unique position to train their workers on how to best protect their accounts from cyberattacks that can drain their hard-earned medical expense savings.
Criminals see HSAs as ripe for plundering
HSAs have surged in popularity in recent years, with assets growing by 18% between mid-2023 and mid-2024 alone. There are an estimated 38 million HSA accounts in the U.S. with a combined $137 billion in funds, according to investment research firm Devenir.
Thanks to the portability of these accounts and the ability to invest them in investment funds — much like 401(k) plans — some HSAs hold large balances. That makes them especially appealing to cyber criminals.
While HSA providers have invested heavily in cyber security, threats continue to evolve because cyber attackers aren’t always breaching the providers directly. Sometimes, they gain access through third party vendors or by leveraging personal information leaked in unrelated breaches.
For example, HSA provider HealthEquity reported that attackers gained access to one of its business partner’s accounts in 2024, potentially compromising the personal data of more than 4 million account holders.
Criminals may also send scam e-mails which direct account holders to bogus sites that steal their account username and password.
Once attackers have access to personal information, they may bypass security measures through phishing e-mails, social engineering tactics or brute-force password attacks. In some cases, they exploit weak or reused passwords and intercept sensitive communications.
Employers can help
Given how deeply integrated HSAs are into employee benefits, employers can help by providing training that teaches their staff how to protect their HSA accounts and recognize phishing attempts or social engineering scams.
Cyber-security education doesn’t have to be complex. Even short, focused sessions on topics like password hygiene, spotting suspicious e-mails and using multi-factor authentication can make a significant difference.
Here are some steps every HSA holder should take:
Monitor account alerts and e-mails: Always check for e-mails or notifications about changes to your account, like updated contact info or security settings. If something looks unfamiliar, report it to your HSA provider immediately.
Review account transactions regularly: Just like with a bank or credit card statement, it’s important to review your HSA transactions to ensure all activity is legitimate. Most providers allow users to freeze their benefits card if they suspect fraud.
Use strong, unique passwords: Never reuse passwords across accounts, and consider using a password manager to create and store complex, randomized passwords. The longer and more unique the password, the better.
Enable multi-factor authentication: Many providers are expanding MFA options to add an extra layer of security. This can include verification codes sent via text or e-mail, or biometric verification.
You have a great group of employees working with you and your business is thriving. For many small-to-mid-sized businesses that success is due to key employee with both skills, experience and connections that would be difficult to replace.
But what if one of your personnel were injured and out of work for a while, or even worse, suppose they died unexpectedly? Would your business survive without this key person’s involvement in your operations?
If this were to happen, you’d likely immediately have to find and train a replacement, but getting the right person for the job would require a substantial amount of training and building on-the-job knowledge. During this transitional time, you could face losing business if you are unable to fulfill all of your orders or contractual obligations or if delivery time starts slowing.
Fortunately, there are two products that would provide your organization with additional funds to weather this uncertain time: key person life insurance and key person disability insurance.
Key person life insurance
Generally, your business purchases a life insurance policy on a key employee, pays the premiums and is the beneficiary in the event of the employee’s death. As the owner of the policy, the business may surrender it, borrow against it and use either the cash value or death benefits as the business sees fit.
However, coming up with a dollar value on a key employee’s economic worth can be challenging.
There are no specific rules or formulas to follow, but there are several guidelines that can help.
The appropriate level of coverage might be the cost of recruiting and training an adequate replacement.
Or, the insurance amount might be the key employee’s annual salary times the number of years a newly hired replacement might take to reach a similar skill level.
Finally, you might consider the key employee’s value in terms of company profits. The level of insurance coverage might then be tied to any anticipated profit or loss.
Premiums for key employee life insurance are not a tax-deductible business expense for federal income tax purposes, since your business is the recipient of the benefits. For the most part, the death benefits your company receives as the beneficiary of the policy are not considered taxable income.
However, if your business is a C corporation, the death benefits may increase the corporation’s liability for the alternative minimum tax. You should consult a tax professional for information on your specific circumstances.
Key employee disability insurance
The death of a key employee isn’t the only threat to your business. What if a key employee is injured or becomes ill and is out of work for an extended period of time? Disability insurance on such a key employee is another way you can protect your business against any resultant financial loss.
A crucial part of key employee disability insurance policies is the definition of disability.
Typically, these policies define disability as the inability of the employee to perform his or her normal job duties due to injury or illness. As with life insurance, your business buys a disability insurance policy on the employee, pays the premiums, and is named as the beneficiary.
If the employee becomes disabled, the insurance coverage pays monthly disability benefits to your business. These benefits can equal a certain percentage of the key employee’s monthly salary, up to either a maximum monthly limit or 100% of their salary.
The benefits may be used to pay the operating expenses of the business and to cover the expense of finding a temporary or permanent replacement for the key employee.
The disability policies typically offer elimination periods (i.e. the waiting period between the disability and when the benefits begin) ranging from 30 to 365 days.
Depending on the policy, your business may receive benefits for 6 to 18 months, which would be long enough to allow the key employee to return to work or for the company to replace the key employee.
Depending on the type of coverage purchased, the premiums you pay for the key employee disability policy may or may not be a tax-deductible business expense. If the policy is considered business overhead expense insurance, then the premiums are a deductible expense.
While the business would be responsible for paying taxes on any disability benefits received, the business expenses the policy indirectly pays for would result in an offsetting deduction.
The takeaway
Planning ahead can help secure your company’s financial future. Key employee insurance can help assure families, employees, creditors, suppliers and customers that the future of the business is secure.
By purchasing life and disability insurance on the owner(s) and/or key employees, you can are ensuring peace of mind in the event that a tragedy should befall one of your most important personnel.
Employers that have decided to offer their staff individual healthcare reimbursement accounts to purchase health insurance on their own have been encountering administrative headaches.
Simply tracking whether workers in an ICHRA plan have secured coverage can be complicated, but employers need to contend with other compliance issues too. As a result, more firms have turned to third party plan administrators or insurers to simplify enrollment for ICHRAs, which adds to the costs of administering these plans.
ICHRAs are still foreign to most employers and their workers. They became a viable option for funding health insurance for employees in 2020. Since then, they have grown in popularity as they provide another option for businesses to help fund employees’ coverage. Younger and healthier workers have been most responsive to these plans, as the arrangements provide a way for them to secure low-cost coverage on their own.
Employers can contribute a specific amount to an ICHRA each year or each month. Participating employees must use those funds to purchase individual health insurance coverage on an Affordable Care Act marketplace or in the open market.
Employers can offer an ICHRA as a stand-alone benefit or alongside a group health insurance policy. For example, an employer could offer group coverage to full-time employees and an ICHRA to part-time employees.
However, employers who offer ICHRAs may face various administrative challenges:
Documentation —Employers are required to comply with IRS reporting rules, just as they would if they provide health insurance.
Reimbursements —Employers must track reimbursements and verify that participating employees secure and maintain their coverage.
Compliance—ICHRAs must comport with IRS, Department of Labor, ERISA and COBRA regulations.
Employee understanding —Employees may be unfamiliar with ICHRAs and need help understanding eligibility and benefits. This requires additional training as well as one-on-one meetings.
Setup—Employers must navigate setup requirements, determine administrative methods and educate employees.
Other considerations for employers include:
Loss of premium tax credits —Employees eligible for affordable ICHRA coverage lose access to ACA premium tax credits, which reduce their premium on exchanges, resulting in higher costs for them. They lose this credit even if they decline the benefit.
Coverage and family limitations—ICHRA funds cannot be applied to spousal group plans. As a result, family members need to secure coverage from another source, like a group plan for the other parent, or purchasing a plan on the ACA marketplace.
Employee backlash —Since these are still relatively new products, forcing workers to shop for health coverage on their own could create resentment in the ranks.
What employers can do
One benefit of these plans is that they often pull young, healthy workers back into the risk pool. However, older staff with health conditions that increase health plan usage are not likely to go for an ICHRA. Likewise, staff with families needing coverage are likely to balk at the option.
Employers considering offering employees ICHRAs and looking to reduce administrative and other burdens may want to hire a third party administrator specializing in ICHRAs.
Some of these administrators function as a bridge between employers and health insurance companies, facilitating the enrollment process for employees choosing individual health plans. Administrators can manage communication, ensure compliance and streamline the selection of plans available through different insurers.
Companies who prefer not to outsource these functions can:
Use software tools to streamline processes.
Train personnel to manage reimbursements and compliance.
Provide clear communication and training to employees.
Offer support to help employees navigate eligibility requirements.
Work with us to stay up to date on compliance requirements.
Use detailed consolidated invoicing to simplify the billing process.
President Donald Trump, while campaigning, promised his administration would ensure invitro fertilization treatments were either covered by insurance or directly paid for.
However, his recent executive order, issued on Feb. 18, stops short of outlining specific policies to accomplish this. Human resources executives are taking a wait-and-see approach to the order, as it directs the assistant to the president for domestic policy to within 90 days.
IVF is a costly procedure, with a single cycle typically ranging from $15,000 to $20,000.
While some employers — primarily large corporations — have expanded fertility benefits, many workers still lack access.
More than 20 states have laws requiring certain health plans to cover some fertility treatments, but these mandates exclude self-funded employer plans, which cover 61% of insured workers.
As a result, only a small percentage of employees benefit from these requirements. Some large employers have turned to third party fertility benefit providers, which operate outside traditional health plans, to offer IVF coverage.
Actions taken at the legislative level
According to legal experts, Congress would have to pass legislation to mandate broader health insurance coverage for IVF.
Recent legislative efforts have stalled. In 2023, the Right to IVF Act was introduced after the Alabama Supreme Court ruled embryos should be considered children, a decision that temporarily disrupted IVF access.
The bill, which aimed to protect IVF access, was blocked in Congress. Another bill, the bipartisan HOPE with Fertility Services Act, sought to amend the Employee Retirement Income Security Act to require insurers to cover infertility treatments, including IVF, but it died in a House of Representatives committee in 2024.
What HR leaders should watch
While this executive order signals a federal focus on IVF access, it does not provide immediate solutions. Employers should monitor policy recommendations expected within 90 days and potential legislative efforts that could mandate insurance coverage.
Still, there are a few points to consider for employers:
Cost management — The order’s emphasis on reducing out-of-pocket and health plan costs for IVF treatments may require employers to review and potentially adjust their health plans to comply with new regulations or recommendations that emerge from this order. This could involve negotiating with insurance providers to cover IVF treatments more comprehensively.
Cost reduction — The order calls for a reduction in the costs of IVF and employees’ out-of-pocket costs. Reallocating cost away from an employee’s out-of-pocket expenses to the health plan would make the entire employer health plan more expensive.
Regulatory compliance — Businesses will need to stay informed about any new policies or regulations that arise from this order. Ensuring compliance with these changes will be crucial to avoiding legal issues.
Recruiting and retention — Enhancing access to IVF treatments could be a significant benefit for employees, potentially improving employee satisfaction and retention. Corporations might consider promoting these benefits to attract and retain talent.
Over the past several years, the PBM landscape has shifted significantly—and that rapid shift continues today. What was once considered satisfactory, or part of the status quo, is simply no longer acceptable. And we’re not just talking about industry “buzzwords” that have largely gone the way of the cliché. But let’s start there.
The Fall of “Transparency”
While not a legal term, “transparency” is, without a doubt, one of the most overused, over promised, and severely underdelivered concepts in the health benefits space—but particularly in the PBM world. While anyone can say they’re transparent, or claim to deliver the “most” transparent services, what does that actually mean? Well, that can vary tremendously.
The fact is, it’s all relative. While a PBM can be transparent, that doesn’t mean they have a client’s best interest as their top priority. To put it bluntly, they’re often just open about revenue sources (and claim that to be “total” transparency). For the client, however, that doesn’t mean much at all for their bottom line—as these PBMs can still engage in undisclosed spread pricing, rebate-driven revenue models, and markups.
The Rise and Thrive of Fiduciary
With a marketplace demanding more, fiduciary PBMs—like US-Rx Care—have become the clear alternative to the status quo. For fiduciary PBMs, who are contractually obligated to act in the best interest of every client, transparency, fairness, trust, and accountability aren’t just buzzwords that marketers throw around—they are guarantees.
With the fiduciary model, every dollar spent for PBM services MUST be compliant with these contractual obligations. This means the client’s money is only spent on cost savings and service fulfillment. There are no “gotcha” moments. All compensation sources, including rebates, administrative fees, and other revenue streams are clearly disclosed.
The Water Bill Metaphor
Think of the traditional “transparent” vs. fiduciary PBM argument like your monthly water bill. The bill is transparent in the sense that you can see what your total bill is, but you may not necessarily have insight to where every dollar is going or what you’re ACTUALLY paying for. Think of it as “additional” or “admin” fees. But, regardless, you continue to pay to ensure that you have water to use.
Under a fiduciary contract, you would know for certain that you’re getting the best rate possible and that every dollar you are spending is being used to work in YOUR best interest—not to line the pockets of the water company or pay for things that don’t serve any purpose for you directly.
Building an Effective Fiduciary Strategy
Fiduciary PBMs are important today because they provide a more ethical and cost-effective approach to managing prescription drug benefits, which is crucial for controlling the rising costs of healthcare.
An effective fiduciary strategy means full pass-through pricing (no surprises—knowing where every dollar is going), no spread pricing (charging more for drugs just to make a profit), an alignment of interests between the client and the PBM, along with independent and unbiased formulary management.
The result? TRUE transparency, lower long-term costs, and better health outcomes for patients.
Let ‘s talk about what our unique fiduciary approach at US-Rx Care can deliver for you and your clients!
Chronic health conditions are a growing problem for workers, damaging their well-being, productivity and job satisfaction, according to a new study.
The “U.S. Employee Perspectives on Managing Chronic Conditions in the Workplace” poll by the Harvard T.H. Chan School of Public Health and the de Beaumont Foundation found that 58% of U.S. employees report having a physical chronic health condition such as hypertension, heart disease, diabetes or asthma. Among them, 76% need to manage their condition during work hours, yet 60% have never formally disclosed their health issues to their employer.
This lack of disclosure can create issues for both the employer and worker, affecting productivity, job satisfaction and overall workplace well-being.
Implications
Each year, chronic conditions account for $1.1 trillion in health care costs and $2.6 trillion in lost productivity, including $36.4 billion in employee absences, according to Kaiser Permanente.
Employees with chronic health conditions may be keeping mum for a variety of reasons, including:
Fear of stigma,
Concerns about missed work opportunities, and
Negative performance reviews.
As a result, employees are forced to make difficult choices:
36% have skipped medical appointments or delayed care to avoid interfering with their job.
49% felt unable to take time off or even a break despite needing one for their health.
33% reported missing out on additional work hours or projects due to their condition.
25% believe they have been passed over for a promotion because of their health issues.
Unaddressed chronic health conditions contribute to:
Absenteeism,
Decreased performance, and
Increased turnover.
Beyond managing their own health, many employees also care for family members with chronic conditions. One-third of workers have had to help a family member with a chronic illness in the past year, and 45% of those caregivers needed to do so during work hours.
The case for employer support
In a tight labor market, businesses that take proactive steps to support employees with chronic conditions can maintain a healthy workforce and gain a competitive advantage.
A minority of employees feel their workplaces are supportive of their needs:
44% say their employer is very supportive of allowing breaks or paid leave.
37% report strong employer support for flexible scheduling.
Only 27% say their employer is very supportive of remote work, even when the job allows for it.
How employers can help
According to the Centers for Disease Control and Prevention, many chronic conditions are linked to modifiable behaviors, including:
Tobacco use and secondhand smoke exposure,
Poor diet, including high sodium and saturated fat intake with low fruit and vegetable consumption,
Not being physically active, and
Excessive alcohol consumption.
Here are several ways for employers to support staff with chronic conditions:
Promote open dialogue—Create a culture where employees feel safe discussing their health needs confidentially. Help them access necessary accommodations without fear of judgment or career repercussions.
Encourage regular testing and doctor’s visits—Encourage your staff to take advantage of their health plans’ benefits, like annual blood work and health exams, and to follow physician-recommended regimens.
Offer flexible scheduling and remote work options—Allow employees to adjust their schedules or work from home when needed. This can help them manage medical appointments and symptoms more effectively.
Improve paid leave policies—Provide paid leave to help employees address their own or their family’s health needs.
Promote wellness programs—Offer resources such as health coaching, on-site screenings and wellness incentives that encourage employees to prioritize their health. Offer programs focused on tobacco- and alcohol-cessation programs.
Train managers to support employees with chronic conditions—Educate supervisors about chronic illnesses and workplace accommodations to help create a more inclusive and understanding environment.
