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I am often asked about the conflict of interest with Health and Welfare Trusts and their portability - especially when it comes to employee retention.  Many people will argue that the notional credit HSA model, where the employer can take back the funds if the employee quits, does a better job of retaining talent.  To this I often respond with…”just like how salary keeps them, right?”

You see, very few people leave companies for money, they leave it for people, policies, or practices they feel they can better relate to.  Money may be a driving factor, but the reality is that employees tend to leave companies because they no longer have a bond to the people, leadership, or culture of the company they are with.  So the use of an HSA as an employee retention tool, where it is a benefit as long as they are employed by the company, can actually be a negative versus a positive.

This is why I love the Health and Welfare Trust as a form of HSA.  When an employer offers it to their employee, they are saying “Here is a benefit I think you could use and I hope it helps you today, and in the future”.  There are no conditions to the gift you are providing them as an employer.  When you offer something as a condition of employment, your gesture may send the wrong message to the employee.

If you still want this to be a retention tool, why not focus on the deposit schedule versus limiting access.  You can fund the employee’s HSA using a monthly schedule and let them know that you will continue to fund the account until they cease to be an employee.  For many employees, the value of the funds will become apparent the first time they send in a claim.  When they realize how much they can save each month and what they can save for healthcare-wise in the future, the incentive to stay is pretty much established. 

The bigger perk is that the gesture, seeing how it does not come with any conditions, is a more employee focused benefit and makes you look like a HR hero versus a cheap old bugger!