Most employees focus on comparing insurance carriers and which plans they provide during open enrollment. Employees want to choose the most cost-effective coverage that meets their needs. This task is getting harder with each passing year due to rising health care costs. One often disregarded benefit is a health savings account (HSA).
An HSA is a savings account that employees use toward future medical expenses. Both employees and employers can contribute to HSAs. In order to be eligible for an HSA account, the employee must enroll in a high-deductible health plan (HDHP). Most companies offer a variety of HDHPs. An HDHP is an insurance plan with lower than average monthly premiums and a higher deductible. HDHPs combined with HSAs save employers more in the end over health services covered by a health maintenance organization (HMO).
While employees may initially balk at higher deductibles, having an HSA can offset medical expenses. Many employers contribute a certain amount to HSA accounts. Add in employee contributions, and out-of-pocket costs are no longer as daunting. If the employee does not use the money in their HSA right away, they continue to amass more savings for future medical expenses. This option appeals to employees as their employer deducts less money each month toward health care costs and it allows them to save for their future health needs.
Because combining HDHPs with HSAs can save employers a significant sum over time, they must stress the benefits to their employees. Many employees are unaware that HSAs can follow them from job to job and that their contributions are tax-free. To learn more about HSAs and benefits solutions, contact us.