Health Savings Accounts Benefit Both Employees and Employers
As an employer, you might often think of things like healthcare plans and retirement accounts as “benefits” that you offer to employees. And yes, those things do quite literally benefit them. But you might be surprised to learn that a comprehensive benefits package also works in your favor, in a number of ways. This is particularly true with regard to health savings accounts.
A health savings account can be established when you participate in a low-premium, high-deductible group healthcare plan. The account helps your employees to budget and plan for large out-of-pocket healthcare expenses, such as deductibles, co-payments, and medications. And since the account is funded with pre-tax dollars, diverted from their paychecks, employees appreciate the potential income tax savings.
But that’s not all! Health savings accounts benefit employers in a number of ways, too.
It’s not exactly a raise, but functions like one. Because the money placed into a health savings account is not taxed, employees keep a bit more of their money by lowering their taxes. In 2023, individuals can contribute $3,750 and those with family coverage can contribute $7,750 to an HSA. That adds up to a significant amount of pre-tax income that is diverted toward important expenses.
HSAs serve as a back-door retirement planning tool. Retirement plans are already viewed by employees as important parts of a competitive benefits package. But because health savings accounts are portable, and because unused funds roll over year after year even into retirement, an HSA can actually function as a long-term financial planning tool.
You can make matching contributions. Employers are not required to contribute to HSAs, but they can establish a matching funds benefit if they want.
Workers who feel supported and valued are productive, loyal employees. A comprehensive benefits package is one of the most compelling reasons new employees will seek out a new company, and current employees will decide to stay. Creating a healthy, financially successful workforce helps both employers and employees alike.
For more information on establishing a health savings account, give us a call. We will help you determine whether you’re eligible to participate in this valuable benefit.