When it comes to open enrollment periods, employees typicallyfocus their attention on evaluating insurance providers andconsidering which health plan is right for them and their family.Because health care costs have risen so much over the last decade,the most critical factor in making that decision tends to center onout-of-pocket costs and the level of coverage provided in eachplan. However, employees should also keep in mind the significanceof an oft-overlooked benefit: the health savings account (HSA).

An HSA is a savings account that can be used to cover medicalexpenses this year or in the future, e.g., retirement. In order tocontribute to an HSA, they must be enrolled in ahigh-deductible health plan (HDHP). And chances are their companyis already offering one or more of these options.

An HDHP is a health insurance plan with lower monthly insurancepremiums and higher deductibles than the traditional health plan.Although seeing “higher” anything when it comes to insurance —unless it’s higher coverage — can make anyone skeptical, there isindeed a silver lining here for employers and employees alike.

Among the 2,500 companies surveyed by benefits consultant Mercerin 2015, 59 percent said that they offer an HDHP, up from 48percent in 2014. By 2018, it is projected that three-quarters ofcompanies will offer HDHPs. According to the Kaiser FamilyFoundation, four percent of employees in 2006 were enrolled inemployer-sponsored high-deductible plans; however, that number shotup to a quarter of employees in 2015. In addition, nearly 50 percent of millennials are jumping on thebandwagon, opting for lower-cost health plans with deductibles.Despite some initial negative perceptions of high deductible plans,when paired with an HSA, these plans offer employees arguably themost valuable benefit for health care (and retirement) savings. Thereduced premiums, flexibility, and long-term savings benefits aredefinitely an upside to HDHPs.

For employers, HDHPs translate to real savings. Last year’sMercer National Survey of Employer-Sponsored Health Plans showedthat the medical cost per employee enrolled in a HDHP associatedwith an HSA averages $9,228, compared to $11,248 for HMOs and$11,212 for PPOs. That equals a substantial savings of about 18percent. Importantly, if the employee sets aside $2,000 into anHSA, they are prepared for the potential of needing to coverdeductible out-of-pocket costs. And, if they are healthy and don’tneed this money for health care right away, these savings willaccumulate for future health care costs.

From an employee perspective, choosing an HDHP with an HSAtypically delivers the lowest-cost option in terms of paycheckdeduction, an incentive to manage health care costs, and theopportunity to save money for future health care expenses.

HSAs offer a triple tax advantage: Contributions to HSAs aren’ttaxed — which means contributing lowers an employee’s taxableincome — the balance grows tax-free, and the funds are availabletax-free to pay health costs. While more popular retirement savingsvehicles — 401(k)s, individual retirement accounts (IRAs), and RothIRAs — can be used to fund health care expenses, HSAs offer theadditional tax advantage of allowing the employee to withdraw thismoney any time between now and retirement, should they need it topay for health care. And unlike flexible spending accounts (FSAs),HSAs are portable, meaning they go with the employee to newemployers, and they remain a universal benefit even for those whohave left the job market for good. There’s no timeline for spendingHSA funds, and they carry over year to year. And if money from anHSA isn’t needed for medical expenses, it can growtax-deferred.

In 2015, an estimated 16.7 million HSAs were open. By 2019, itis projected that the number of HSA account holders will increaseto 30 million. The growth is encouraging; however, confusion on thefull benefits of HSAs still persists among employees. According toa 2016 study by HealthSavings Administrators and HSA Coach, aquarter of millennials (two times the percentage of those fromother generations) were unaware that their HSA funds could beinvested. And according to Bank of America Merrill Lynch’s Workplace Benefits Report, 8 in10 employers stated that their employees look at their HSA not aslong-term savings, but near-term spending accounts.

In that light, employers cannot underestimate the value oflaying out a basic description of how it works and how it benefitsthem. This means generating interest, engagement, and actionleading up to the open enrollment period. For example, savvyemployers offer information in multiple formats: FAQs, in-personpresentations, and Q&A sessions, as well as videos, webinars,and other online tools.

Open enrollment or not, now is the time to help all employeesbetter understand HSAs. Virtually all employers want theiremployees to thrive, but while many companies stress the importanceof a 401(k), most merely mention the HSA in passing.All retirement options should be taken seriously, or else employeeswill find out too late the significant difference between the two.An HSA allows the same tax benefits that a 401(k) does, but a401(k) does not allow disbursements until retirement. As such, HSAaccount holders won’t have to wait for retirement and can use fundsfor both current and future medical expenses.

The long and short of it is this: Save those 401(k) dollars fortrips to see the grandkids. Save your HSA dollars for those medicalexpenses to be incurred during retirement. If you are lucky enoughto not need these funds in retirement, you can have the same taxadvantages as with your 401(k).

More serious consideration of an HSA by employees during openenrollment will help them to take full advantage of the costsavings, prepare for future health care expenses, and build aretirement nest egg. The HSA is an unsung hero when it comes tomoney management up to and during retirement, and just like ourhealth, we shouldn’t take for it granted. Rather, we should takefull advantage of its many benefits.