Who wants to add another new benefit to your existing stable of employee benefits? Most are time intensive and cost prohibitive. This is the anthesis of what an SMB owner needs. Employers and employees are left stuck in the mud. The same benefits year over year, with a higher price tag. Will offering an HSA break this cycle?
The Benefits Equation
Benefits options aren’t just about adding something new. They need to create clear cost vs. expense value for employers and employees. This usually comes in the form of increased employee productivity or retention.
Will this benefit increase your profit or keep you competitive when recruiting employees? This is the simplest equation that employers can use to evaluate benefits.
What is the Value of an HSA for Small Business?
Small businesses need to find benefits that don’t cost them much time or money. They need to find benefits that employees want. An HSA might be one of the few benefits that check all of these boxes. However, an HSA cannot exist on its own. It works in conjunction with an HSA-eligible health plan, like an HDHP.
HSAs create a direct avenue for employees to save pre-tax dollars for health expenses. Younger employees (with lower expected out-of-pocket costs) can use their tax-advantageous HSA account to invest their HSA dollars. Older employees or employees with families (with higher expected out-of-pocket costs) can use their pre-tax dollars to limit the real dollar increase in medical costs year over year. They can also use the money they might have saved in their HSA from years past. HSA funds never expire.
In all situations, this means more financial stability for employees. This means less productivity loss for employers. Healthy employees are productive employees.
With all of these varied benefits, employers might expect a big price tag. Unlike rising health premiums costs, your employer-sponsored HSA has a simple set monthly cost, at least with Lively.
Is an HSA an Industry Standard Offering?
Not yet, but we are close to the tipping point. In 2016, 29% of employes offered an HSA-eligible health plan. Over 22 million Americans have an HSA. HSAs are growing at a faster rate than the 401(k) industry.
This means if you aren’t educating yourself and reviewing HSA providers you should be. As a small business, if you aren’t offering an HSA, you likely will be soon!
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
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.