Health Savings Account
A health savings account, or HSA, from Blue Cross Blue Shield of Michigan is a win-win for employers and employees. This type of account not only helps save on health care but it also offers tax savings and investment options.
Like all consumer-directed health spending accounts, an HSA helps your employee budget for health care expenses. HSAs have a few unique pieces to consider though.
Unlike other options, an HSA is more like a 401(k). Your employee owns the account funds, which roll over, and they get to choose how to spend their money. Employees can use it all on medical expenses, or they can build up a retirement investment account. HSAs can be funded by employers, employees or both.
Because your employees can see how their funds are used, an HSA often translates to more responsible health care spending.
Offering an HSA is a good choice for those who want to spend less time managing employee health care. As a cost-sharing plan, it can also help lower company expenses. Employees will benefit, too, because HSAs offer a lot of tax savings and investment choices.
You can learn more about how an HSA stacks up to other account types with our Consumer-Directed Health Comparision Guide (PDF).
These plans usually have lower monthly premiums and offer a wide range of benefits, including everything from office visits and maternity care to inpatient hospital and preventive care.
Want to see plan details? We offer an HSA-compatible plan for each group size.
If you have 1,000 employees or more, connect with us for a customized solution.
Although HSAs are employee owned, employers can contribute as well. In fact, employer contributions are the best way to motivate employees to participate in an HSA.
A 2019 Employee Benefit Research Institute® study showed that when employers contributed to HSAs, total contributions were nearly $400 higher.
Not only that, when employers make payroll contributions to their employees' HSAs, they reduce their own tax burden. They also lessen their requirements for paying into things like worker's compensation and state and federal unemployment. Contributions also get treated as a deductible business expense.
Employers can contribute funds one of three ways:
You've made a great choice by offering your employees a high-deductible health plan with a health savings account. This means they get quality benefits and savings at the same time. If you're interested in improving your employees' engagement with your HSA-compatible plan, try these three simple tips. Tip one, contribute to your employees' HSAs. Employer contributions can help increase employee satisfaction, attract and retain talent, and grow your employees' savings so they can afford the care they need. So if you aren't making contributions, now's a great time to consider it. For companies with fewer than 500 employees, the average yearly employer contribution is $750 for an individual plan and $1,200 for a family plan. Larger companies generally contribute $500 for individuals and $1,000 for families. Employer contributions also encourage employees to take action and contribute funds to help boost their HSA savings. And there are tax advantages for both you and your employees. HSA contributions through payroll reduce employer payroll taxes and lower FICA, state and federal unemployment, and worker compensation contributions. Employer contributions are also treated as a deductible business expense. Tip two, educate your employees. Too often, annual open enrollment is the only time employees hear about HSAs. Consider ongoing outreach to keep your employees informed and engaged. Our consumer-directed health care toolkit is a great resource to help you share information throughout the year and aid in higher plan adoption during open enrollment. Visit bcbsm.com/engage to view, download, or print materials. Here you'll find ready-to-use flyers, emails, newsletters, and brochures. Tip three, make sure your employees understand an HSA's savings power. Unexpected health care expenses and retirement healthcare costs can be overwhelming. A great way your employees can prepare for and counter these worries is to boost their HSA savings. Make sure your employees are aware of ways to boost their savings, such as contributing the maximum allowed annual contribution. They can visit irs.gov for current HSA contribution limits. Investing in available mutual funds once their balance reaches a certain threshold. Making the allowed catch-up contribution if they're 55 or older. Follow these tips to help your employees engage in and see the value of their HSA.
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