Creating ways to extend the dollar value of an employee’s salary can help improve your benefits offering. HSAs helps employees save more money for health costs.
Let us show you how to help your employees avoid more taxes, with a health saving account (HSA). The tax advantages of an HSA are clear. Additional benefits further increase the value of an HSA offering for employers and employees.
HSA Tax Savings
A health savings account enables employees to make pre-tax contributions via paycheck deductions. This requires Employers to work with an HSA provider for administration or make direct deposits into their employee’s HSA. Employees can continue to leverage the power of an HSA’s tax savings through tax-free interest or investing. Employees can leverage tax-free funds if they use their HSA for qualified out-of-pocket medical expenses.
Most HR benefits expire every 12 months, the HSA is one of the few HR benefits that last a lifetime, like a 401k. Employees can use the funds they contributed (or that an employer contribution) for qualified out-of-pocket medical this expenses, this year or anytime in the future. In fact, after the age of 65, employees can use HSA for anything like a 401k or IRA.
Benefits that last longer than 12-months provide value for employees that they can take with them, even if they leave their current employer.
There isn’t a week in which the increase of healthcare costs doesn’t make the news. It is costing employees more out of pocket and employers more in monthly premiums. This is likely why high deductible health plans (HDHP) are on the rise and account for over 30% of all employer-sponsored health insurance plans.
These plans by definition have higher out-of-pocket costs. Coupling an HDHP with an HSA, allows employees to offset healthcare costs using the pre-tax HSA money. This limits real dollar costs for employers. HSAs create dedicated health savings for planned and unplanned health costs.
Helping employees save more money for healthcare to reduce health costs creates a lifetime benefit. HSAa creates a dedicated savings account that can reduce health cost and increase employee’s financial security. Helping employees save money, at little cost to you, is always a win-win.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.