If you’re considering offering a high-deductible health plan (HDHP), know the benefits of an HSA. HSA accounts provide employees with an additional avenue for retirement planning as well as a safety net for day-to-day medical expenses. With the lower monthly premiums of a HDHP, employees can save funds for when they are needed most.
The money in an HSA account rolls over year after year, and employees can take the account with them when they move on. Individuals can contribute to HSA until enrolled in Medicare, even if unemployed or self-employed. As long as they use the money for qualifying health expenses, it remains tax-free. There is no ‘use it or lose it’ penalty that is seen with a flex-spending account. When candidates explore new employment benefits programs, the option of an HSA is often seen as a competitive advantage.

Employers will also see advantages as there is often lower cost associated with offering HDHP for employees. Plus, contributions can provide tax benefits by reducing your Federal Insurance Contributions Act (FICA) or payroll tax liability. These tax benefits are notable to large employers as well as independent contractors and small business owners.