Health Savings Accounts are tax free savings accounts for healthcare related expenses. These accounts allow employees to put tax free income into a bank account specifically reserved for healthcare spending. Health Savings Accounts allow employees to save money, have better control of their health related finances, and they’re budget friendly for all employers. Better yet, when you allow employees to fund their Health Savings Account through your corporate wellness program, you encourage employees to have a consciously healthier lifestyle, both physically and financially.
How Do Health Savings Accounts Work?
To be eligible for a Health Savings Account, you need to have a high deductible health plan. This means that employees will be paying a bit more for certain health care services until their insurance will begin to cover the costs. As of 2018, high deductible health plans are plans with a deductible of at least $1,350 for an individual or $2,700 for a family.
Employers and employees are able to make contributions to a health savings account, but the funds are solely the employee’s. They don’t expire, so account holders don’t have to worry about losing funds each year.
IRS approved items that can be purchased with HSA funds at any time include:
- Doctor’s Office Visits
- Physical Therapy
- Prescriptions
- Eye Exams, Medicated Eye Wear
Click here for the full list.
Why Use Them?
There are benefits for both the employer and the employee. Employers love it because it reduces insurance premiums as well as payroll taxes. Employees will appreciate that you can deposit tax free income into the account, that also earns tax free interest! After the age of 65, account holders may withdraw money from their accounts without tax penalties. Juse like 401k’s, these deductions are tax free (which makes HSAs a pretty comparable retirement savings option.) Employees also benefit because monthly health insurance payments are cheaper than low deductible health insurance, so it really allows account holders to only pay for the health care services that are being used.
Health Savings Accounts and Wellness Programs
To take full advantage of an HSA, allow employees to earn funds through their wellness program. This way employees are essentially investing in their own health by participating in the wellness program and they get a real financial return in the form of additional money in their HSA accounts. Here’s what we suggest:
Match It:
Match employees contributions if they are actively participating in your wellness program. We suggest increasing the possible amount of matched incoming if employees do any of the following:
- Participate in a charity run
- Attend Wellness Committee Meetings
- Participate in any Fitness Challenge
- Go to the gym at least 8 times a month (IncentFit Rewards allows you to fund HSA’s based on the fitness activity that they do!)
Incentivize It:
Allow employees to earn funds for their Health Savings Account by participating in fitness challenges in their wellness program. They can do things like:
- Get a physical
- Attend a fitness class
- Go for a run
- Participate in a fitness challenge
Health Savings Accounts are great for those who want more control of their health care expenses. Allowing employees to earn contributions through the company’s wellness program is the perfect way to support a healthier lifestyle for your staff. By becoming healthier, they won’t have to spend as much on health related expenses. It all works out. Don’t have a wellness program set up yet? Contact IncentFit. Funds earned with IncentFit can be deposited directly to health savings accounts!