Health Savings Accounts – An alternative for businesses
Along with all the other concerns you have as a business owner, you also need to consider health care options not only for your employees, but yourself. If the Affordable Care Act remains in effect, businesses with 50 or more full time employees will be required to offer health insurance by 2014 or be penalized. Even if you don’t have this large of a company, attracting and retaining talented employees often comes down to the benefits package you offer. If you’re able to provide some sort of healthcare coverage you will be a more sought after employer.
In 2003, health savings accounts (HSAs) were introduced as an alternative to traditional plans. Paired with a high deductible health plan, these accounts allow people to manage their own healthcare dollars and contribute up to a certain maximum per year to the account tax-free. As long as the dollars held in the account are used for medical purposes they are never taxed. HSA Specialist, Amy Evans-Yochum outlines the benefits. “The employer will see a decrease in health insurance premiums compared to a traditional insurance plan. If the employer chooses to help fund the HSA accounts, this amount may be included as part of the overall cost of their medical insurance benefit.
The employee is also likely to see a reduction in their portion of the health insurance premium. The employee can contribute to a HSA and all contributions are non-taxable and can be used for current or future medical expenses. As long as the funds are used for qualified medical expenses, this money will never be taxed. Unlike a Flex Spending Account (FSA), funds that are not used will carry over every year and will not be lost.”
Citizens National Bank has been offering HSAs for several years now and we’ve seen increased interest in the product over the past year. According to Evans-Yochum, “As health insurance premiums continue to rise, employers are looking to reduce their health care costs while continuing to offer health care benefits to their employees. Often, the HDHP/HSA option allows the business to remain within their budget while offering a health plan that encourages the employee to put money aside for their current and future medical expenses.”