There are many reasons why companies are choosing to offer health savings accounts (HSAs) as a part of their employee benefits package. Health insurance prices are on the rise, and HSAs help business decrease costs. A company also may choose to offer HSAs in addition to more traditional health care options as a part of a more competitive and inclusive benefits package. Furthermore, HSAs don’t require much administrative work on the company’s end.
What is a Health Savings Account (HSA)?
Health Savings Accounts are just savings accounts that allow account holders to save money specifically for health care. Similar to a 401k, money stored into the account will not be taxed if withdrawn after retirement age. However, unlike a 401k, IRS-approved medical expenses before age 65 do not get taxed either. This makes them very effective for helping employees save up money to deal with high-deductible health insurance plans.
HSAs for Managing Wealth
Many employees use HSAs because they allow the consumer to more easily plan for medical expenses. However, HSA’s can be a great tool for managing wealth as well. It’s actually more tax advantageous for employees to store money in an HSA than a 401k or an IRA. This is because while IRAs and 401Ks are not subject to federal and state taxes, they are still subject to FICO tax. Furthermore, unlike flexible spending accounts (FSAs), the money in an HSA carries over completely to the next year and the balance will still be yours if you are no longer with your current employer.
HSA Implementation Recommendations
If you’re thinking offering an HSA might be right for your company, here are four steps on how to effectively implement the program:
- Educate: Provide staff with comprehensive information on what a Health Savings Account is, and any pros and cons.
- Communicate: Let employees know about the plan’s existence!
- Plan Comparisons: Provide materials that allow employees to easily compare different healthcare plans and health savings accounts.
- Personalized Scenarios: Offer tools to help employees predict how this will affect their finances. We’ve heard great things about Amino.
IncentFit and Health Savings Accounts
With Incentfit any financial incentives earned through your wellness program can be deposited directly into an HSA. That means that the employee earns their company’s HSA investment by investing in their own health with exercise (or other healthy activity). Ask us today how you can develop a stellar wellness program that supports your employees financial goals.