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Employers – A Quick Guide to Health Savings Options

Lively · April 27, 2017 · 4 min read


Employee benefits account for nearly one-third of total employee compensation. That’s a big slice of the pie. So, if you make the decisions for your company’s benefits package, you want to clearly understand your options.

Health Savings Options

You may currently offer or are considering offering a health savings option, such as a Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA) to your employees.  Both are popular choices.

How do you choose the best fit for your company? Prior posts compared HSAs to Flexible Spending Accounts (FSAs) and HRAs. This post compares the HSA/FSA/HRA options from an employer’s perspective as the plan sponsor.

Let’s start by reviewing the holy trinity of employee benefits decision-making – Control – Cost – Savings.

More Control

Admit it. Who doesn’t want more control when it comes to spending their hard-earned dollars? Control can be a good thing. But, too much control can also backfire. Employers need to find the sweet spot between control, cost, and savings (which could be in the form of time).

HRAs deliver the most control to plan sponsors. Employers control what happens with HRA funds and have more flexibility over plan designs. The chart below compares various features of an employer’s health savings options.

What’s the Cost?

Costs take many shapes in employee benefits, such as premium, administration, and employee education costs.

  • The HSA-qualified HDHP significantly reduces premium costs.

  • Plan sponsors who self-fund are often drawn to HRAs that help manage costs through flexible plan design.

The administrative cost is where the rubber meets the road. Depending on company resources, employers may choose to outsource some or all the administration of the savings option(s) it selects.

Choosing the right vendor can have a huge influence on an employer’s decisions. Services may include eligibility screening, enrollment, payroll deductions, contributions management, or claims administration. Employers should make sure they have full disclosure of service fees to weigh their options.

Employee education is often a forgotten aspect of administration. However, the lack of education is costlier than the task itself. Employees don’t enroll in what they don’t understand. And if employers don’t understand the differences between the savings options, we guarantee that your employees won’t either.

As mentioned in previous posts, often times, employees confuse the HSA with the FSA. Some even think they are the same thing! So, don’t forget to factor in the cost of employee education and the benefit of a vendor who shines in that area.

Show Me the Savings

In addition to cost and time-saving administration, consider the tax advantages of an employer’s savings options.

Tax deductible/FICA/FUTA Savings

  • Employer contributions are not subject to withholding from wages for income tax

  • Those contributions are not subject to the Federal Insurance Contributions Act (FICA) or the Federal Unemployment Tax Act (FUTA)

IRS views contributions to an HSA through a cafeteria plan as employer contributions. We’ll discuss more about the effect of Section 125 cafeteria plans in a future post.

Can Employers Combine Savings Options?

Yes, employers can combine savings options with certain restrictions. Let’s look at how you can coordinate an HSA with an FSA and HRA.

Let’s say an employer offers an HDHP and a health FSA or an HRA. Employees use those accounts for getting reimbursed for qualified medical expenses. Usually, that means employees are not allowed to make contributions to an HSA. Bummer…EXCEPT (don’t you love exceptions?) when an employer offers a special kind of FSA or HRA. Check out the illustration below to see what makes the FSA or HRA special.

You can see there a lot of moving parts when selecting a savings option that is best for an employer and its employees. The level of control, cost, and savings you incur are major factors. Each business is unique. We recommend you review your options with your benefits broker, consultant or legal representative.



Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

piggy bank on pink background


2024 and 2025 HSA Maximum Contribution Limits

Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa


What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

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.



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