What is a Health Savings Account?
A health savings account can help employees pay for things that wouldn’t normally be covered by health insurance premiums. The alternative to a health savings account is a flexible spending account. The main difference between the two is that an employer owns the FSA account and the money in it whereas the employee owns the HSA and the money in it. The money that your employee has in an HSA can be used to cover many health-related expenses.
What Can an HSA Cover?
An HSA can be used to cover a variety of things. However, this normally doesn’t include health insurance premiums. Some of the most common things employees use an HSA to pay for include:
- Deductibles, co-pays, and co-insurance
- Prescription medication
- Trips to the dentist and optician
- COBRA payments
- Long-term care services
If employees have a cost that’s related to healthcare that isn’t covered by their health insurance plan, they can use their HSA to cover the costs. For example, if your employee has an appointment with an optician and finds out they need glasses, their HSA funds can cover the cost of a pair of glasses or contact lenses.
The Benefits of an HSA
There are many things about an HSA that may appeal to your employees including:
- All contributions made to an HSA are tax deductible up to the annual IRS limit.
- If your employees are aged 55 and over, they’re eligible to make an additional catch-up contribution of $1,000.
- The funds carry over from year to year and are safe within the HSA.
- Since the employee owns their HSA account, it can also be used to make investments.
Benely are Here to Help
Our team of benefit experts have many years of combined experience in the health insurance industry. When you partner with us, you ensure that your employees get access to industry-leading experts who can guide them on through their choices. If you’d like to explore the idea of introducing your employees to an HSA, contact our team today and we’ll advise you on the best possible action.