HSA Plan Tax Benefits for Employers

June 20, 2023

If you are in charge of creating the benefits packages for your employees, you don't want to overlook a Health Savings Account (HSA). With an HSA, you can take advantage of several tax benefits that will set both you and your team up for success.

These accounts essentially function as personal savings accounts. Employees can place tax-free contributions into their account and use the funds to pay for out-of-pocket medical expenses, including:

  • Complementary treatments.
  • Drug addiction treatment.
  • Feminine hygiene products.
  • Fertility services.
  • Monitoring.
  • Prescriptions.
  • Vision and dental care.
  • Over-the-counter drugs.

HSA Tax Advantages for Employers

HSA Tax Advantages for Employers

While an HSA offers countless benefits for employees, you'll also get to experience tax savings and benefits as an employer. When you offer an HSA plan, you'll save money while experiencing peace of mind knowing you're helping your team members prepare for medical expenses and their future.

Here are some benefits of offering an HSA:

Attract and Retain Employees

Most employees aren't just looking for a fulfilling career and great salary. Many are also interested in the benefits your company can provide them with — specifically healthcare. Applicants want to know that you value their health and wellness enough to make healthcare easily accessible and affordable.

By offering an HSA, you can increase the desirability of your workplace, helping your business attract more qualified applicants. With the right benefits, you'll also increase the chances of retaining top talent over time.

Save on Premiums

Another way HSAs can benefit your organization is by helping you save on health insurance premiums. By combining an HSA with a high-deductible health plan (HDHP), you'll provide your team with a healthcare plan without paying the much higher premiums and healthcare costs.

Reduce Taxes

By offering an HSA, you'll also cut down on the amount of taxes you pay. As an employer, you won't have to pay taxes on any pre-tax contributions. This includes Social Security, federal income tax and Medicare taxes. This is because the Internal Revenue Service (IRS) doesn't consider the contributions as wages.

How to Set up an HSA for Your Employees

Interested in setting up an HSA so you can start experiencing the benefits? Getting started is simple. Here's how to set up an HSA for your employees:

  1. Determine if you're eligible to offer an HSA plan.
  2. Decide how much your employees will contribute.
  3. Choose your HSA administrator.
  4. Set up a section 125 cafeteria plan.
  5. Organize and manage tax documents and contributions.

See the Savings With The Difference Card

For over 20 years, The Difference Card has been providing cost-saving healthcare solutions. We've helped our clients save an average of 18% on their annual health insurance costs. With our health insurance solutions, you can also take advantage of benefits like wellness strategies and proprietary medical reimbursement systems.

Want to learn more about how we can help you see the difference? Contact us today to learn about The Difference Card's HSA offering.

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