Since their inception in 2003, Health Savings Accounts (HSA) have increased in popularity as more people realize the benefits. An HSA allows participants to pay for their deductible, coinsurance, co-pays, and over-the-counter medications with triple tax savings. Employers can write off the money they contribute to their employees’ HSA accounts, as well as save on FICA taxes due to reduced taxable income for employees because of their pretax contributions.
When it comes to selecting an HSA trustee, you have a lot of options. With TASC, you get more than a bank trustee. You get a leader in compliance and employee reimbursement with over 40 years experience.
Here are several reasons why an employer might want to offer a Health Savings Account (HSA) to their employees, so why offer an HSA?
- Cost Savings: HSAs can be a cost-effective way for employers to offer healthcare benefits to their employees. This is because HSAs are paired with a qualified high-deductible health plan (HDHP), which means that the employer’s insurance premiums are lower than they would be for a traditional health plan.
- Tax Benefits: HSAs are unique in that they carry a triple tax advantage. Triple tax advantage means that contributions go into the account tax-free, existing funds grow tax-free when invested, and withdrawals are tax-free when used for qualified medical expenses. Plus, after the age of 65, withdrawals for non-qualified medical expenses are simply taxed at your regular income tax rate and no longer carry the same penalty as before.
- Employee Satisfaction: Offering an HSA as part of a benefits package can help attract and retain employees. Employees appreciate having control over their healthcare spending and the tax advantages that come with an HSA.
- Flexibility: HSAs offer flexibility in how funds are used to pay for healthcare expenses. Employees can use their HSA funds to pay for a wide range of medical expenses, including deductibles, co-payments, and prescription medications.
- Portability: HSA accounts are owned by the employee, which means that they can take their HSA with them if they leave their job or retire. This makes HSAs an attractive option for employees who are concerned about their long-term healthcare expenses.
- Savings: HSAs are a fantastic way for employees to save money for medical expenses at retirement. They can also continue to contribute to the account after they leave the employer, provided they maintain a qualified HDHP.
TASC HSA Features:
- HSA Trustee – TASC HSA pairs with any carrier HDHP allowing participants HSA account consistency even if you change carriers. Unlike bank HSAs, we understand the regulations tied to HSAs and participants have access to the industry services leaders for all their eligibility questions.
- Interest Earning Accounts – HSA funds earn interest on both their cash account and investment account. Cash accounts earn interest which is applied quarterly. Investment accounts earn dividends, which work the same way as interest, except earnings on dividends fluctuate based on market performance. Employees can choose a maximum cash balance to quickly retrieve HSA funds for medical expenses and have any excess HSA funds automatically swept into investment accounts.
- Enrollment Education – TASC’s electronic employee HSA Guide outlines HSA benefits and IRS regulations to help increase employee understanding and participation.
- Electronic Files (EDI) – We accept feeds from a wide variety of systems helping simplify enrollment, ongoing eligibility management, and payroll deductions.
- Guaranteed Compliance – Our compliance experts ensure that your plan adheres to the ever-evolving regulations governing tax advantaged Universal Benefit Accounts.