Many of the benefits of choosing a Health Savings Account (HSA) over a traditional health insurance plan can directly affect the bottom line of an employer’s benefit budget.
• HSAs are dependent on a high deductible insurance policy, which lowers the premiums of the employee’s plan.
• All contributions to the HSA are pre-tax, lowering the gross payroll and reducing the amount of taxes the employer must pay.
• Employers may contribute to HSAs.
• HSAs capture the attention of employees by shifting payment responsibility.
• Employers incent employees by funding an HSA based on the employee’s collaboration in the healthcare and wellness components.
Some reasons employees benefit from HSAs are:
• Their contributions are pre-tax.
• Interest and other earnings on HSAs are tax-free.
• Withdrawals for qualified medical expenses are tax-free.
• No year-end loss – HSA balances grow from year to year.