Employee Benefits: How HSAs Benefit Your Business
With health care costs continuing to rise, it is more important than ever for organizations to craft and carefully plan an employee benefits strategy.
Integrating HSA-eligible plans (typically QHDHPs) with health savings accounts (HSAs) offers distinct cost benefits, not only for your employees but your business as well. But according to a recent CDHP Enrollment & Usage Trends Report, nearly 50 percent of employer respondents indicated their employees weren’t aware of the tax advantages HSAs have to offer.
To clear up any confusion, let’s go over the definitions of these acronyms.
- QHDHP: Also known as a Qualified High Deductible Health Plan, QHDHPs have a higher annual deductible than a traditional plan.
- HSA: A Health Savings Account is a supplementary account for individuals with QHDHPs that can help to offset medical expenses. You must have a QHDHP in place before you can legally open a HSA.
Making the investment into an HSA is a way for you to help employees manage health care costs, but it can also pay off for your business in a variety of ways.
The Advantages of Investing in HSAs
Take a closer look at the benefits health savings accounts can offer your business.
1. No “Use it or Lose it” Penalty
Although HSAs are similar to flexible spending accounts or FSAs in that they are an excellent way for employers to help with out of pocket medical costs, there is a fundamental difference between the two offerings. Health Savings Accounts rollover, which means you won’t need to remind your employees to use it before the year’s end.
2. Tax Savings
HSAs are made up of tax-free contributions and withdrawals for qualified health care costs. Employers can potentially save up to 7.65% in employer tax costs. We suggest you discuss the potential tax benefits of employer contribution with your ShopBenefits.com advisor or CPA.
3. Portable Account
Health Savings Accounts are portable. What this means is, if an employee retires or changes jobs, they can take their account with them and use the monies for qualified expenses. Employees can continue to contribute to their HSA account only if they have a QHDHP plan with their new employer. If there is no QHDHP in place, they can continue using the monies but cannot continue their contribution. The individual benefit offering makes your benefits package much more competitive as you look to attract and retain employees.
Are HSAs Right for You?
If you’ve weighed the benefits and are wondering how HSAs might fit with your employee benefits package, consider finding a broker who can help walk you and your employees through the benefits of HSA programs.
If you still have questions, reach out to one of our Benefits Specialists and ask about setting up an HSA for your employees today.