General Information Help
By offering HSAs through their cafeteria plans and/or providing employer HSA contributions, employers potentially have much to gain.
- Contributions are considered employer-provided coverage for medical expenses
- Increased ability to attract and retain employees
- Lower overall health insurance costs
Employees might benefit from participating in an HSA program in the following ways.
- Ability to carry over contributions
- Portability of assets
- Payment of medical costs with pretax dollars
- Potential for additional employee benefits
Health savings accounts (HSAs) are tax-favored savings arrangements for individuals and families covered by high deductible health insurance plans. HSAs were created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and became available January 1, 2004.
HSAs allow for tax-deductible contributions and tax-free distributions if distributed amounts are used to pay for qualified medical expenses. Qualified medical expenses include expenses incurred by spouses and dependents even if they are not eligible for an HSA. Although employers may contribute to an employee’s HSA, each HSA is owned and controlled by the individual, not the employer.