Just one in five business owners fully understand important elements of health savings accounts, according to new research from the Nationwide Retirement Institute.

Nationwide surveyed 406 U.S. business owners with 11 to 500 employees in February and found that 41% of business owners offer their employees an HSA. Another 21% are considering an HSA, while 38% state they are not considering an HSA.

A striking number of millennial business owners are leading the way with HSA adoption.

According to the survey, 81% of millennial business owners today offer an HSA option, compared to 44% of Gen X and 25% of boomer-owned businesses.

Nationwide announced in October that it planned to begin offering HSAs this year.

The larger the business, the more likely it is to offer an HSA: 59% of companies with 51 to 100 employees offer an HSA and 60% of companies with more than 100 employees offer one, compared to only 25% for companies with 50 or fewer employees.

However, the survey also found that many of the business owners had misconceptions around the benefits of an HSA and misunderstandings on how HSAs operate. Among those surveyed, many didn’t understand that it’s necessary to provide a high-deductible health plan (HDHP) when offering an HSA, that employers can contribute to employee plans, and HSA balances carry over year-to-year.

Nationwide asked the survey respondents about the benefits of an HSA. According to the survey, business owners who already offer an HSA report that the main benefits are providing tax advantages (56%) and the ability to cover health care deductibles and out-of-pocket expenses (58%).

Less than half (43%) said saving for retirement is an advantage associated with HSAs. In contrast, those who don’t offer HSAs and are not considering to do so said they are unsure of the advantages associated with HSAs.

“Health savings accounts are effective tools for business owners and employees alike,” John Carter, president of Nationwide’s retirement plan business, said in a statement. “They can supplement retirement savings plans by promoting greater savings and easing retirement concerns around healthcare costs, while offering special tax treatment not found in other retirement accounts.”

In addition to misconceptions around the benefits of an HSA, a gap exists in understanding that businesses must provide a HDHP to offer an HSA.

According to the survey, 6% of business owners with 101-500 employees answered that their business offers an HSA despite indicating they did not offer an HDHP option, which would not be possible.

Looking specifically at millennial business owners, the survey finds that they possess a mostly solid knowledge about the important elements of HSAs, in addition to how HSAs can be advantageous for them and their businesses.

However, only 31% of millennial business owners knew that HSA balances carry over year-to-year.

According to Carter, Nationwide believes the “growth of health savings accounts follows the same upward trajectory of defined contribution plans.”

“As employers become more familiar with health savings accounts, advisors need to help ensure they understand the associated benefits,” he said in a statement.

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