Why Offer an HSA? Plus, See the 2023 HSA Limits!

There are several reasons why an employer might want to offer a Health Savings Account (HSA) to their employees, so why offer an HSA?

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.