Excerpt from PlanSponsor article, Bridge the Knowledge Gap
Priorities for contributions. When employees have both a 401(k) and an HSA, where should they contribute first? Kevin House, managing director, head of Via Benefits, WTW’s individual health-care marketplace business, in Detroit, generally recommends contributing first to the 401(k) up to the match, then to an HSA, then any extra money into the 401(k). Sponsors can provide educational programs to help employees set their savings priorities.
Such programs can be especially helpful for young employees, who tend to know even less about HSAs than about 401(k)s. They often choose the high-deductible health plan to save money on premiums if they are healthy, but they fail to recognize how much they can benefit from years of an HSA’s tax-advantaged growth. “It’s a great opportunity if you’re in your 20s and healthy and have a little disposable income,” House notes.