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Employees Invest in Themselves with a Health Savings Account

For businesses that choose to offer group health insurance to employees, a question of cost versus benefit always arises. You hope to offer the best healthcare policy possible to your workers, but you might end up choosing a plan that carries a higher deductible. Don’t despair; by offering health insurance, you are still providing a wonderful benefit. And luckily, we have ways of mitigating the burden of high deductibles.\r
In these situations, a health savings account (HSA) is often the perfect solution. Your employees no doubt enjoy the low monthly premiums of their healthcare plan, but they might worry about meeting their annual deductibles. An HSA allows them to stash tax-free money (that is, deducted from paychecks before taxes are taken out) in a spending account. Your workers can then use the funds in this account to pay for unexpected medical bills, so that a high deductible is not seen as an obstacle to medical care.\r
Not everyone is eligible to open an HSA. In 2017, you can pair this type of account with any plan that carries an annual deductible of $1,300 (for individual coverage) or $2,600 (for family coverage). That means quite a few of the group health insurance plans available in California can be paired with an HSA.\r
Each year, an individual can contribute a certain amount to their health savings account. In 2017, the limit is $3,400, or $6,750 for those with family insurance coverage. Those aged 55 and older can contribute an additional $1,000 to their accounts.\r
Holders of health savings accounts can contribute money for as long as they are enrolled in a high-deductible health insurance plan. If that plan ends, or they upgrade to a low-deductible insurance policy, they can no longer contribute to the HSA. However, unused money rolls over from one year to the next, and the money is theirs to keep.\r
In fact, an HSA can serve as an additional retirement planning vehicle. Unused funds, rolled over from one year to the next, can be used on medical expenses in retirement. By helping employees to establish a health savings account, you are providing them with a useful budgeting tool now – and potentially a valuable source of much-needed funds in retirement.\r
As always, contact us with your questions about group health insurance and other employee benefits. We can help you decide what works for your business, while providing excellent care and coverage to your employees.

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