How Do I Set Up Emergency Savings Account Incentives?

Vestwell’s Emergency Savings Account (ESA) allows you to choose between a variety of contribution options—ways you can provide money towards your employees’ ESAs when they sign up and save. These contribution options are also referred to as employer incentives as they incentivize your employees to save more towards their ESA accounts. Adding employer incentives to your Emergency Savings Account (ESA) is a great way to boost employee participation in your program.  If you choose to contribute to your employees’ ESAs, you can select from any combination of the incentive options listed below. Even a small incentive amount can have a big impact on your program’s success and your employees’ financial security. 

In this article, we’ll walk through how to set up each of the different incentive options and begin contributing towards your employees’ ESAs. 

Table of Contents

Incentive Options

  • Initial Deposit Bonus - An initial deposit bonus, or sign-up bonus, is a one-time contribution that you can make when participating employees register and make their first contribution to their Vestwell ESA. You will set a minimum contribution threshold that employees must meet to receive your bonus.
    • For example, you can choose for employees to receive a one-time $50 bonus, if their first ESA deposit is at least $100.
  • Company Match - A company match is a recurring contribution you can make to an employee’s ESA that matches an amount an employee has contributed each pay period up to a maximum set by you. You will also set a lifetime cap on matching contributions, so that your total matching contributions for each employee never exceed a certain amount. 
    • For example, if you match a maximum of $100 each pay period, if an employee contributes $50, you’ll match the $50 into their ESA. If they contribute anything over $100, you’ll only match a maximum of $100 per pay period. If you set a lifetime match cap of $1,000, an employee will stop receiving your match once you’ve made $1,000 in matching contributions into their ESA.
  • Milestone Bonus - A milestone bonus is a one-time contribution you can make once employees have reached a certain savings milestone in their ESA. This milestone is a dollar amount set by you. 
    • For example, you can choose for employees to receive a one-time $100 bonus, once they have reached a balance of $1,000 in their ESA.

During your ESA onboarding process, you’ll be given the option to set up these incentives for your ESA program. If you skipped adding incentives during the onboarding process, you can always add them later on at any point. Reach out to clientsuccess@vestwell.com, and we’ll help you get ESA incentives set up for your program. 

How to Set Up ESA Incentives

1. Name the Employee Group Receiving Incentives

During the ESA onboarding process, you will be brought to the “Employees and Incentives” section. The first step in setting up any incentive is to designate and name the employee group(s) receiving your incentives. Note that at this time, you are only able to create one employee group. Your employee group should include all the employees that you will allow to participate in your ESA program. You can include whoever you like in this group as long as they are at least 18 years old. 

Please enter the name of your employee group where your portal says “Employee Group Name.” For example, you may name your group “managers” if this group of employees only contains managers. You can also add an optional description of this group you’ve created where your portal says “Description.” Then click Save & Continue to proceed.

2. Select Your Incentives 

You will now be brought to a page to select the incentive options for your employee group. The initial deposit bonus, company match, and milestone bonus incentive options will all be displayed. Select from any combination of the incentives (one, two, or all three). If you don’t want to set up incentives at this time, you can click “I prefer not to set incentives.” Then click Save & Continue

3. Set Up Your Incentive Structure

We’ll now walk through how to set up each of the three incentive options.

Option 1: Initial Deposit Bonus

Select the Initial Deposit Bonus option to set up this incentive. If you choose to offer this incentive, you will set the initial deposit bonus amount you will provide towards all employees in this group when they make their first ESA contribution. To set your bonus, enter in the dollar amount you’ll contribute on the dotted line underneath where your portal says “Bonus amount.” 

You will also set a minimum contribution threshold that your employees must meet in order to receive your initial deposit bonus. For example, you can choose to only provide your bonus when employees make a first contribution of at least $100. Enter this dollar amount on the dotted line underneath where your portal says “Required minimum deposit.” 

Option 2: Company Match

Select the Company Match option to set up this incentive. If you choose to offer this incentive, you will set the per pay period maximum match amount you’ll contribute for each employee. Enter the maximum dollar amount you will match towards an employee’s ESA each pay period on the dotted line underneath “Match per pay period.” For example, if you match a maximum of $100 per employee each pay period, if an employee contributes $50, you’ll match the $50 into their ESA. If they contribute $100 in a pay period, you’ll match the $100 into their ESA, but if they contribute anything over $100, you’ll only match a maximum of $100 per pay period.

You will also set a lifetime match cap per employee. This means that your total matching contributions for a particular employee will never exceed a certain amount throughout the time the employee remains working for your company. For example, if you set a lifetime match cap of $1000 for each employee in the employee group, each employee will stop receiving your match once you’ve made $1000 in matching contributions into their ESA. This applies across all pay periods; even if the employee continues to save into their ESA, they will receive no further matching contributions once the lifetime maximum has been hit. Enter this dollar amount on the dotted line underneath “Lifetime Match Cap.”

Option 3: Milestone Bonus

Select the Milestone Bonus option to set up this incentive. If you choose to offer this incentive, you will set the bonus amount you’ll provide to all employees in this group when they save a certain milestone amount in their ESA. To set your milestone bonus, enter the dollar amount you’ll contribute on the dotted line underneath where your portal says “Bonus amount.” Then set the milestone threshold that employees will need to hit to receive your bonus. Enter this dollar amount on the dotted line underneath where your portal says “Maximum Threshold.” The milestone amount is based on total account balance, inclusive of both employee contributions and any of your employer contributions towards an ESA. 

For example, if you set a bonus amount of $500 and a milestone threshold amount of $2000, employees must hit $2000 in their ESA in order to receive your milestone bonus of $500. 

4. Verify Your Incentive Structure 

At the bottom of your screen you will see a blue box that automatically totals the maximum amount you have set to contribute towards each employee across all incentives. This is labeled as “Maximum cost per employee” and it represents the maximum amount you would be contributing towards each employee if the employee hits all your bonus and matching contribution criteria. If you offer an initial deposit bonus, you will see the initial deposit bonus amount you have set per employee in this box. If you offer a company match, you will see the lifetime match maximum you have set for each employee. If you offer a milestone bonus, you will see the milestone bonus amount you have set per employee. 

Once you are satisfied with your incentive structure, click Save & Continue

5. Review Your Incentive Structure 

Once you have designed your incentives, you will be brought to a summary screen to review your structure. This screen will display the incentive amounts and any maximums and/or thresholds you have set for the various incentive options for each employee. You will also see the maximum amount you have set to contribute towards each employee labeled as “Maximum cost per employee”

If you’d like to change any of your incentive details, you can click the Previous button to make edits to your incentives. If you are satisfied with your structure, click Save & Continue and you are all set. You have now successfully set up your incentives, and your employees will receive your designated ESA contributions when applicable.

ESA Incentive FAQs

Are there any rules for determining who is eligible to receive an incentive?

You can designate whoever you’d like to receive your incentive contributions as long as they live and work in the United States and are at least 18 years old. These employees just need to be included in the employee group where you have set your incentive structure. 

Can I set up multiple incentives?

Yes. You can use any combination of the three types of incentives.

What is the difference between an ESA match and a retirement plan match?

The concept of a “match” contribution is the same for both an ESA and a retirement plan account. They both refer to an employer contribution type where you provide a certain amount of money towards an employee’s account that is based on the amount an employee contributes. The amount you contribute “matches” the amount the employee has contributed, up to a maximum set by you.

For example, take an employer who matches a maximum of $500 of an employee’s ESA contributions each pay period. 

  • If an employee contributes $500, the employer also matches $500. 
  • If an employee contributes $600, the employer matches only $500.
  • If an employee contributes $250, the employer matches $250. 
  • If an employee contributes $0, the employer also contributes $0. 

Retirement plan matching contributions have different rules than Vestwell ESA matching contributions. For retirement accounts, the match dollar amount or match percentage that you contribute to your employees’ retirement plans is set during the plan design phase and elected in your plan adoption agreement. 

Retirement plan match contributions and Vestwell ESA match contributions also differ in terms of contribution limits. Different types of retirement plans have varying limits on the total amount of employer contributions, including match contributions, that you can make into an employee’s retirement account per year. These contribution amounts are set by the IRS and are updated annually.

Vestwell’s ESA has no limitations on total contribution amounts. As long as the funds are available in your employees’ paychecks, they’re able to save practically any amount into their ESA. Furthermore, you may contribute—or match—as much as you would like to your employees’ ESA accounts.  

If you have any further questions about your Vestwell retirement plan match or ESA match, please reach out to clientsuccess@vestwell.com

How do I change my incentive settings?

If you have any questions regarding your chosen settings or would like to make any changes, please reach out to clientsuccess@vestwell.com