Small businesses are constantly looking for ways to provide employee benefits, while still maintaining control of overhead. One asset that can help small business is a health savings account (HSA). HSAs are designed to allow taxpayers to set aside funds to cover the costs associated with medical care. The dollars placed in the account are not subject to federal income tax when deposited. Individuals who do not have health insurance can benefit from using HSAs as a means to cover their out-of-pocket medical expenses.
Benefits of HSAs
Here are some of the ways that HSAs save money for individuals and small business owners who participate:
The tax break that covers the funds deposited in HRAs is passed on to the individual accountholder. The more money deposited in the account, the less federal income taxes the accountholder will have to pay.
HSAs are conjoined with a high-deductible health insurance plan that is the responsibility of the individual. This means employers do not have to assume the costs associated with group health insurance plans.
HSA funds can be rolled over into the next year. There are no restrictions or penalties for not using all of the funds in a calendar year.
HSAs accrue interest over time.
HSAs are unique alternatives for small business owners wishing to help employees stay healthy and manage the costs of healthcare. They feature less risk for the employee and more benefits for the individual. Implementing HSAs in a small business is evidence of the employers concern for the welfare of employees, yet it is an affordable and manageable option at the same time.
HSAs for Companies Large and Small
While HSAs are great for individuals and small businesses, larger businesses are also turning to them as a means of covering employees that are not benefitted by health insurance plans. Industry leaders like Walmart and UPS have developed HSA programs to extend a helping hand to some of their employees. Overall, HSAs are a unique alternative to expensive health insurance programs. They provide small businesses with the level of affordability and flexibility that is desperately needed in these tough economic times.