Reduced Health Plan Costs: HSAs paired with high-deductible health plans (HDHPs) can reduce health plan costs by covering out-of-pocket fees.
Tax Savings: Employers benefit from reduced employer FICA taxes and federal unemployment (FUTA) taxes due to employee contributions to HSAs.
Limited Employer Involvement and Expense: HSAs can be established and operated with minimal employer involvement and expense.
No Need for Third-Party Administrators: Unlike FSAs and HRAs, employers do not need to hire third-party administrators to process claims, saving money.
Simplified Reporting: Employers are only required to report HSA contributions accurately on employees’ Forms W-2, with no need for Form 5500 (Annual Return/Report of Employee Benefit Plan) filings.
Increased Employee Retention: Offering HSAs can be a valuable benefit, increasing employee retention and satisfaction.
Flexibility and Customization: Employers can allow employees to make pretax payroll deduction contributions to HSAs under their Section 125 cafeteria plans, providing flexibility and customization.
No “Use-It-or-Lose-It” Concerns: Unused HSA contributions can be rolled over to the next fiscal year, eliminating the “use-it-or-lose-it” concern.
Tax-Deductible Employer Contributions: Employers can make tax-deductible contributions to employees’ HSAs, providing additional benefits.
Employer Education and Support: Employers can direct employees to educational resources, minimizing the need for employer expertise and support.
Compliance with Changing Regulations: Employers can rely on HSA custodians to ensure compliance with changing federal, state, and international tax policies and regulations.
Competitive Advantage: Offering HSAs can be a competitive advantage in attracting and retaining top talent, as employees increasingly value this benefit.
Data-Driven Decision Making: With HSAs, employers can track employee healthcare expenses and make data-driven decisions to optimize their benefits strategy.
Network Benefits