By establishing a Health Savings Account (HSA) program [in conjunction with a high-deductible health plan (HDHP)] in your company, you are allowing your employees to take healthcare savings back into their own hands and make the decisions that are right for them personally. HSAs let you and your employees take advantage of the following benefits:

Expanded Availability
HSAs improve upon Archer Medical Savings Accounts (MSAs) because HSAs are available to all eligible individuals, not just the employees of small businesses and the self-employed.

Contribution Options
You can make contributions to HSAs of your employees as an added benefit to assist employees in paying their medical expenses. The maximum annual contribution amount is the standard limit.

Additionally, a “catch-up” contribution is available for eligible individuals who are age 55 or older by the end of their taxable year and have not enrolled in Medicare. The chart above shows the contribution limits.

Tax-Free Benefits

HSAs allow you and your employees to make deductible contributions and accumulate earnings tax free. The distributions are also tax free as long as they are used for qualified medical expenses. Now, that is a win/win benefit you both can enjoy.

Flexibility in Spending

HSAs are used to pay for or reimburse qualified medical expenses—from health insurance deductibles and co-payments to certain over-the-counter medications and out-of-pocket expenses—for your employees and their family members.

Year-to-Year Savings

You have heard the phrase, “Use it or lose it.” Well, an HSA is not like that at all. HSA balances automatically roll over from year to year, allowing individuals to budget for health expenses and build up savings to cover qualified medical expenses when the need arises.

 Individual Ownership

An HSA is owned by each individual and is his/her responsibility to maintain.

As you can see, it is to your benefit and your employees’ advantage to offer an HDHP to your employees so they can take advantage of the benefits of an HSA. 

Contact your local branch today for more information!

Take a look at our HSA Straight Answers to your HSA Questions Brochure (Adobe Reader required--Free download here)

 The above information is  intended to provide general information on federal tax laws governing HSA’s.  It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances or under you state tax laws.

 For specific information, you are encouraged to consult your tax or legal professional.  IRS Pulication 969, Health Savings Accounts and Other Tax-Favored Health Plans, the instructions to IRS Form 8889, and the IRS’s web site, www.irs.gov, may also provide helpful information.