Key takeaways
- A Health Payment Account (HPA) gives employees interest-free access to up to $2,000 to cover out-of-pocket healthcare costs, making it easier for them to seek care without delay.
- Offering an HPA can drive adoption of high-deductible health plans: one employer saw 40% of employees switch to an HSA-qualified plan when an HPA was offered alongside it.
- At a low cost to employers, HPAs can help stretch benefits budgets further, support demand for high-cost treatments, and empower employees to make smarter healthcare decisions.
Rising healthcare costs are always a challenge for benefits teams, and this year has many really feeling the pinch.
Here’s what’s driving the pressure:
- Commercial healthcare spending is projected to grow 8% from 2024 to 2025, driven by inflation and rising demand for GLP-1 drugs.1
- That follows a 7% increase in average family premiums in 2024, with Kaiser Family Foundation reporting a record high of $25,572 for employer-sponsored coverage.2
With headwinds like these, it’s easy to see why some organizations consider cutting benefits.
In these headwinds, it’s easy to understand why many organizations might consider cuts to their benefits packages. But one of the best ways to tackle healthcare costs and reduce your overall spend is by actually adding a benefit—the Health Payment Account (HPA).
An HPA is a low-cost, flexible payment tool that helps employees cover out-of-pocket healthcare expenses. Here’s how it works:
- You define the limit for a revolving line of credit.
- Employees get immediate access to that credit for eligible healthcare costs.
- Through HealthEquity partner Paytient, employees can access up to $2,000.3,4
With an HPA, your people have access to another payment option, one that provides peace of mind and potentially enough comfort to select a lower premium health plan, seek preventive care, and use funds on expensive but niche healthcare needs.
All of that can save your organization significant amounts of money. In this article, we’ll explore how.
How can an HPA help you cut costs by boosting adoption of lower-cost plans?
If you want to reduce total spend, steering more employees toward lower-premium plans often does the heavy lifting. The challenge is that many of those plans, like HSA-qualified high-deductible health plans (HDHPs), can feel financially risky to employees who worry about higher out-of-pocket costs.
An HPA can reduce that fear by giving employees immediate access to an employer-defined, interest-free way to cover eligible out-of-pocket expenses.
A study from Paytient found that 34% of employees with access to an HPA would consider switching to a plan with lower premiums.5 And in practice, employers have seen even greater success: in one case study from a Paytient client, 40% of employees opted into an HSA-qualified health plan when an HPA was offered alongside it.
HPAs also maximize the value of HSAs themselves. HPAs provide employees with another way to pay for care, giving them increased flexibility. This can allow employees to keep their HSA funds intact, growing with interest or potential growth with investment for the long haul. Alternately, employees can pay back their HPA with pre-tax funds.6
All of that means employer contributions stretch further, and employees start to think more intentionally about how they engage with their benefits, planning ahead, asking questions, and generally taking a more active role in managing their care.
How can an HPA reduce the downstream costs of deferred care?
Cost is one of the top reasons people avoid getting care, even when they need it. According to a 2024 Kaiser Family Foundation study, one in four Americans said they put off getting healthcare because of the cost.7 And when employees skip preventive care or delay needed treatments, those costs can snowball and end up leaving them—and your organization—with an even higher bill.
A study from the Commonwealth Fund found that over half of people with employer coverage who deferred care due to cost felt their health problem got worse because of the wait. That can lead to more ER visits, avoidable hospital admissions, or simply higher costs because of worsened health.8
HPAs can help prevent that. Paytient found that 80% of employees with access to an HPA card said they would have postponed or skipped care without the HPA, and 78% felt they were healthier because of their HPA.9
With lower bills and healthier employees, your organization’s total healthcare spend is likely to be much less.
Christy Goldberg-Hirsch, Vice President of Benefits, HRIS, and Payroll at RR Donnelley—a HealthEquity client—also spoke of the “dignity” HPAs gave employees.
“Our people don’t have to face the embarrassment of saying, ‘I can’t afford that,’ because they know they can use their Health Payment Account,” said Goldberg-Hirsch.
How can an HPA help you meet employee demand for expensive treatments without overhauling the plan?
Employees are seeking more from their benefits, including access to high-cost GLP-1 medications or fertility treatments. Updating the core plan to cover every new category can raise premiums quickly, and it may not align with your budget cycle or leadership goals.
HPAs offer a practical middle ground. Because employees can use it across a wide range of healthcare expenses, it can help you respond to evolving needs while keeping the core plan more stable.
What makes an HPA a high-impact benefit for a relatively small cost?
When it comes to cutting costs, most teams think about taking benefits away. But adding the right benefit—like an HPA—can reduce plan costs, improve outcomes, and drive smarter healthcare decisions across your workforce.
As you evaluate HPAs as part of your benefits mix, keep your approach simple and measurable:
- Define what success looks like, such as higher enrollment in lower-premium plans, fewer delayed-care stories, and stronger employee sentiment during open enrollment.
- Plan a communication rollout that emphasizes confidence, flexibility, and affordability, with clear examples employees can recognize.
- Align internal stakeholders early, including finance, leadership, and your broker or consultant, so everyone can reinforce the same message.
Want more ways to stretch your benefits budget? Check out the benefits cost savings playbook and explore how HealthEquity tools can help you save more without sacrificing value.
