Additional HSA Ownership Advantages
- HSAs are triple-tax advantaged: funds saved in the account are tax-exempt, interest and earnings.
- The most significant advantage of Section 125 Premium Only Plan – even without an HSA – is its tax-advantaged status.
- When you pay for insurance through a Section 125 POP plan, the premiums are deducted from your paycheck on a pre-tax basis – that means they come out of your taxable income, reducing both your income tax and FICA taxes. It’s like getting an instant pay raise!
- Expenses are tax-exempt.
- Participants own their individual HSAs, and they can travel with them from employer to employer, in retirement, and during unemployment.
- HSA contributions roll from year to year; there is no deadline for using the funds, and the FSA the use-it-or-lose-it rule does not apply.
- It can also become a supplemental retirement account. While health expenses continue to be eligible expenses for retirees, in addition, retirees can pay for any expense from their HSA with no additional tax penalties,
- Fully integrates accounts with our Limited or Post-Deductible FSA Options, allowing your employees to get even more tax advantage reimbursement savings.
- The Provider Pay and Claims Integration features HR Service B3PA offers which are most advantageous to clients.
- See IRS Publication 502 for a list of qualified medical expenses: https://www.irs.gov/pub/irs-pdf/p502.pdf
- See IRS Publication 969 for information on the tax treatment of HSAs: publications.
- We have partnered with HealthCare Bank to act as the HealthCare Bank for our HSA clients. Healthcare Bank offers a full suite of investment options for account holders with account balances exceeding $2,000.
- “Your Employees Will Appreciate It.” Everybody’s trying to do all they can to save money. An HSA is an excellent benefit because it lets you put aside money to pay for health care expenses. You can earn interest on the contributions tax-free, can spend the money when you need to without a “use it or lose it” deadline, and can use the money on yourself, your spouse, or your kids. Tell your employer how great this would be for you and how offering an HSA makes him look like a hero. It’s an attractive benefit, not only to the current employees but any future talent he might want to attract.
- Including HSAs in the Section 125 plan has the same effect as any other benefit added to the plan – employees contribute, taxable income is lowered, and there are tax savings all the way around. If your employer adds the HSA component and everyone contributes, the tax savings could be huge. The administrative requirements of a Section 125 Plan plan may seem daunting, but there’s no need to be intimidated. Plan administration can be painless if you get the right type of help; that is where we come in.