Health Savings Accounts (HSAs) -- made available to consumers with the passage of the Medicare Modernization Act of 2003 – allow employers, employees and anyone else to contribute money to an account (the HSA), which an eligible individual uses to pay for qualified medical expenses until the deductible is reached.
HSAs make it easy to save on your taxes:
Using funds in your Health Savings Account is easy:
You can make a one-time distribution from an IRA to fund your HSA, provided it doesn't exceed HSA contribution limits. Employees have the opportunity for a one-time, tax-free transfer of funds from their flexible spending account (FSA) or health reimbursement arrangement (HSA) to their HSA.
HSAs can be used to pay for many types of medical expenses, even some that are often excluded on health insurance plans. These include:
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Health insurance plan deductibles, copayments, and coinsurance
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Prescription and over-the-counter drugs
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Dental services, including braces, bridges, and crowns
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Your employees may not understand the benefits of BusinessHSA or the differences between BusinessHSA and traditional group health insurance. Here are a few key point to communicate.
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The Business HSA allows employees the freedom to apply for the health insurance plan that best suits their needs and budget.
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Through employer contributions to an employee's Health Savings Account, a Business HSA empowers employees to manage their own healthcare dollars.
Health Savings Accounts (HSAs) -- made available to consumers with the passage of the Medicare Modernization Act of 2003 – allow employers, employees and anyone else to contribute money to an account (the HSA), which an eligible individual uses to pay for qualified medical expenses until the deductible is reached.
Business HSAs allow employers to help employees with healthcare expenses without sponsoring a group health insurance plan. To participate in the Business HSA, employees must apply and be approved for coverage under an HSA-compatible health insurance plan, and must open a Health Savings Account. Funds contributed to the employee's Health Savings Account may be used by the employee to pay for qualified healthcare expenses on a tax-free basis, or invested and saved for the future.
A Business HSA is a way for employers to assist employees with healthcare costs at a level they can afford. Employees purchase their own health insurance plans and open Health Savings Accounts. Employers contribute pre-tax dollars which may be used to pay for qualified medical expenses or saved for the future.
For Employers
You may save money in the short and long term by:
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Deducting 100% of your HSA contributions from your taxable income
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Having the money in your HSA accrue interest and/or gains on a tax-free basis
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Paying no penalties or taxes when you use your HSA to pay for qualified medical expenses
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"HSA" stands for Health Savings Account. HSAs allow consumers to pay for qualified medical expenses with pre-tax dollars—meaning income-tax free—and save for retirement on a tax-deferred basis.
An HSA is tax-favored savings account that is used in conjunction with a high-deductible HSA-compatible health insurance plan to make healthcare more affordable and to save for retirement.
