What You Need To Know About HSAs As A Business Owner
Health Savings Accounts (HSAs) are an increasingly common way for employers to offer healthcare to their employees that come with a unique set of benefits. However, HSAs might not be the optimal choice for every situation and every employee, so business owners must have a full understanding of what HSAs are and when they should be used.
Protecting the health of your employees will help you retain the best talent, to make sure a lack of coverage does not lead to extended absences and is, overall, the right thing to do. So, let’s dive into what exactly you need to know about HSAs.
What are HSAs, and who should use them?
In short, a Health Savings Account (HSA) is a tax-advantaged health care account that can be offered in conjunction with specific health plan offerings. To save for medical costs, employees who participate in an HSA are given the option to set aside a portion of their paycheck on a pre-tax basis.
An employee can choose how much of their paycheck goes towards healthcare expenses if they have a dependent with high medical costs, the potential for surgery in the future, or they want to be sure that an unexpected medical bill does not throw off their budget.
On a long-term basis, HSAs also help plan for retirement. By contributing into an HSA, employees are able to plan ahead and save in a tax-advantaged way for any medical care expenses that may come after retirement age.
How do HSAs benefit the business owners?
HSAs aren’t just great for the employees, but they are also advantageous for the businesses offering them. For one, a good deal of tax savings is available via federal income tax deduction and reduced payroll taxes. Additionally, because most businesses pay for at least part of their employees’ healthcare plans, the fact that HSAs have less expensive premiums mean the employer saves there as well.
That said, many business owners fail to realize that HSAs aren’t there to replace offerings of a healthcare plan to employees, but rather supplement high-deductible health plans. Employers need to look at their employees, the type of current offerings they have, and the wants and needs of their customers before deciding if HSA offerings make the most sense for them.
To find out more information and determine if offering HSAs to your employees is right for your business, get in touch with Schechner Lifson today to discuss your options.