HSA stands for Health Savings Account. An HSA is a type of savings account that lets employees set aside money on a pre-tax basis to pay for qualified medical expenses. So how do HSAs benefit both employees and employers alike? Paired with an HDHP you can cut costs and provide employees top tax savings on medical expenses.
Employee HSAs Benefits
- Lower monthly premiums: HDHD’s are designed to lower monthly premiums compared to traditional health plans. This allows employees to save each month on their health insurance premiums.
- Tax-free retirement healthcare costs: One of the great HSA benefits is that employees have the option to invest funds and let them grow to cover their medical expenses in retirement.
- Ability to rollover funds and customizable contribution levels: One difference between HSAs and FSAs is that HSAs don’t have expiring limits for funds. Employees are also given the ability to change their contribution levels!
Employer HSA Benefits
- Improved retention: 92% of employees say they want better benefits. An HSA, gives employees an option that they can actively participate in, increasing retention, while also attracting new talent.
- FICA Savings: Employees that contribute to their HSA reduce their taxable wages to the IRS. That means that FICA taxes do not apply to the employee and employer alike, resulting in a 7.65% savings.
- Lower annual premium increases: As employees take control over their health and evolve into more involved healthcare consumers, lower annual premium increases occur.
- Lower insurance premiums: An HDHP/HSA allows your company to save costs on health insurance premiums without sacrificing quality and or coverage for employees.
The Bottom Line
HSAs are a great way to save money for employees and employers alike. HSA plans are not for everyone, but that is why PF Compass is here. We can determine if the plan is right for you, choose the appropriate components of the plan, help you fully understand all risks involved, and understand the carrier’s underwriting philosophy. If you are interested in an obligation free consultation, please feel free to contact us!
PF Compass works with clients who primarily reside up and down the Eastern Corridor. We work with all types of businesses, large and small, across a wide range of industries. Over the years we have created a reputation of providing quality group benefits and unmatched service for all our clients. As a result, we are proud to say that many of our clients have become loyal and continue to work with us for years to come.