If a business offers a High Deductible Health Plan (HDHP) to their employees, they have also given their employees a special key to unlock a special benefit – a Health Savings Account (HSA). This special account has many benefits to both the employer and the employee, offering the most tax breaks of any health benefit option.
The Health Savings Account (HSA) is like a personal savings account but is designed to help individuals save and pay for the qualified health care expenses. The employee uses the HSA funds to pay for thousands of eligible items such as copays, over-the-counter medications, dental, vision, and more with tax-free dollars. The HSA offers excellent tax benefits to help the employee make the most of every health care dollar.
The BASE® HSA not only allows employees to pay for their health care expenses but allows for the opportunity to save for the future, invest funds to build wealth, and create a powerful tool for a retirement portfolio.
Listed below are 7 benefits of choosing the HSA:
- Save on taxes. An employee’s HSA contributions go into the account before taxes. Therefore, by putting money into the HSA it can lower the taxable income, helping an employee pay less in taxes.
- Save on medical expenses. Using HSA funds for coinsurance, copays, deductibles, and other out-of-pocket eligible expenses can help you pay for health care costs that are not covered by the High Deductible Health Plan.
- Hard-working money. The money put into the HSA works hard by earning tax-free interest, the unused funds at the end of the plan year roll over automatically and the employee has the option to spend the HSA dollars on eligible health care expenses or save and invest for the future.
- Triple Tax Savings. Contributions to the HSA are pre-tax, the money grows tax-deferred in the account, and the employee can withdraw it on a tax-free basis, when paying for eligible health care expenses.
- The employee gets to decide when and how their money is either spent or saved in their HSA.
- Investment opportunities. An employee can invest a portion of the HSA balance into mutual funds, stocks, or bonds, depending on a certain account balance.
- HSA funds can be saved for retirement. At the age of 65, an employee can use the funds for any purpose without penalty. The money taken out to pay for eligible health care expenses will continue to be tax free, along with money taken out for other reasons without paying a penalty.
With the BASE® HSA, an employee will see all 7 of these benefits listed above, along with knowing there is no risk of losing money if not used in a certain timeframe. The account will always belong to the individual whether they change jobs or benefits.
With the BASE® HSA, the employees’ contributions help reduce the payroll taxes, helping the employer save. Employers can save money on health insurance premiums since HDHP coverage is usually more affordable and continue to build a strong benefits package to help retain and recruit employees.
Health Savings Accounts will continue to grow in popularity over the next few years, providing employers and employees MORE than just an account to pay for eligible health care expenses and save valuable tax dollars each year.
For more information on the BASE® Health Savings Account (HSA), contact BASE® at 888.386.9680 or visit www.BASEonline.com.