Who saves with Health Savings Accounts?
Trick question. If you’re an employer, you can save money by offering a Health Savings Account. And if your employees participate, they can save too. Why? Two words: “tax-free.”
A Health Savings Account (HSA) is a tax-free savings account that can help your employees pick up the slack from another insurance plan. If your business isn’t ready to offer a high-end medical plan (but you still want to look out for the people who are helping you grow your company) consider offering them a High-Deductible Health Plan paired with an HSA.
A High Deductible Health Plan requires your employees to pay more upfront (by themselves) for covered doctor’s visits and health services before their policy starts contributing. A Health Savings Account lets them make and receive tax-free contributions all year round to pull from for those medical expenses.
Why an HSA is good for you:
You can make tax-free contributions of your choosing (up to $3550 a year for a single employee or $7100 for a family account in 2020). It’s like giving a raise or bonus that won’t ramp up your payroll taxes. (And unlike that raise or bonus, your employees won’t be expecting a specific percentage of their salaries, so you’re a hero.)
You’ll only be kicking in money to employees who have chosen to participate in your health plan – so you don’t have to do it for everyone.
Why an HSA is good for your employees:
The unspent funds in an HSA roll over year after year (unlike a Flexible Spending Account or FSA), so they can invest in it for retirement or other non-medical purposes just like a 401-K or IRA. (There’s usually a minimum balance required first.)
Employees who use healthcare services frequently can pay for doctor bills prescriptions etc. with pre-tax funds (a $100 X-ray bill costs $100 instead of $125) – which adds up to nice health care discount over time.
If a Health Savings Account paired with a High Deductible Health Plan sounds like a good idea for you and your employees, a licensed Mylo benefits advisor can help you explore the most cost-effective options from multiple top carriers. Why not check out your options?Get Started