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If you’re an employer looking for a manageable way to offer your employees health care benefits while keeping costs under control, you may want to consider health savings accounts.
As you face group health care premium increases in 2016, offering high deductible health plans (HDHPs) paired with health savings accounts (HSAs) could lower your costs. HDHPs cut costs due to lower premiums. Employers can then give some of that savings back in the form of contributions to employees’ HSAs. To take full advantage, small business employers should plan to deposit money every payday into each employee’s individual HSA. These contributions are tax deductible on the business’ tax return for the year in which the contributions are made. It is also a win for your employees – the amount of money going into their HSA is not subject to federal income tax or any other payroll taxes. In addition, HSA funds that are withdrawn for qualified medical expenses are not subject to federal income tax. Interest and investment earnings are also tax-free.
Because an HSA belongs to the individual and not the business, employers can enjoy added convenience. Employers are not responsible for administering HSA funds or ensuring those funds are used for eligible expenses. The employee’s unused balance goes with them when they leave the company or retire.
FORUM offers various employee benefits including health savings accounts. If you are interested in learning more, we are happy to help. For more information, call 317.558.6299 and ask for a FORUM Business Development Representative.
The above is not intended to be tax advice, was not written by a tax professional and is informational only. Please consult a tax advisor for your specific situation.
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©2015 FORUM Credit Union