Health savings accounts – Good for your employees and good for you too!
Yes, the national healthcare picture is unsettled and uncertain right now. But, there’s at least one healthcare benefit you can offer your employees that’s a sure thing: a Health Savings Account, or HSA.
If you already offer a High-Deductible Health Plan (HDHP) option to your employees, you’ve taken the first step. You know HDHPs may offer a lower cost to you or your employees than other health plans. And, if some of the savings are funneled as contributions to their HSAs, you get to offer your employees a richer benefit array.
Plus, Your Business Gets at Least Three Great Benefits from HSAs
First, evidence suggests employees who have an HDHP and an HSA are somewhat more likely to pay more attention to general wellness and preventive care. You can further encourage employees to shop around for medical care and research prescription costs by making them aware of free resources like Good Rx or tools available through your insurance provider.
Second, compared to Flexible Spending Accounts (FSAs) or Health Reimbursement Accounts (HRAs), operating an HSA program has notably lower administrative costs.
Finally, HSAs offer a genuine opportunity for you to help your employees save money by 1) providing tax savings because contributions are made pre-tax, and 2) helping them save for retirement. According to a recent study published by Devenir, LLC, nine percent of Health Savings Account holders use their accounts as a part of their long-term investment strategy.
There Are Good Reasons Why You Should Contribute to Your Employees’ HSAs
- Greater tax savings for the business
- An added employee benefit for your workers
- Encouraging a match can ensure your employees are saving for medical expenses
What Might Federal Healthcare Reform Do for HSAs?
At this point, it’s impossible to say. But, some of the potential changes being discussed include things such as:
- Increasing contribution limits to match the annual deductible and out of pocket expense. That’d make it $6,550 for individuals or $13,100 for families
- Introduction of a “child health savings account”
- Allowing individuals to make a tax-free transfer of their RMD into their HSA
- Reducing the penalty for a non-qualified (non-health related) withdrawal prior to age 65 from 20% to 10%
Clearly, none of these provisions will become real until the after the law actually changes. But until then, any way you look at it, HSAs are a win-win-win for you and for your employees!
Where to Get More Information
To learn more about HSAs, start a conversation with Financial Center First Credit Union – a Top 20 HSA provider in the country. Contact Barbara Wood, HSA Administrator at bwood@fcfcu.com or at 317.296.1453.
