When you establish a business health savings account (HSA), it allows your employees to set aside pretax money to pay for qualified medical expenses. The plans are designed to reduce health care insurance costs for employees and employers.

Employee Benefits

For your employees to participate, you must offer a high-deductible health insurance plan. These plans typically cost less than preferred provider or HMO medical plans. As a result, employees are encouraged to take the savings and put it toward an HSA. Then when they have medical expenses, they can use the HSA to pay them. Unlike a flexible spending account, funds in an HSA roll over and can accumulate from year to year.  Over time, your employees can have a substantial, personal savings account.

Employer Benefits

HSA plans can benefit you -- the employer -- as well.

  • You won’t have to pay taxes on HSA contribution dollars as long as they are deducted via payroll.
  • You’ll get a federal tax deduction for contributions made toward your employees’ HSAs.
  • Your employees will have more responsibility for managing their health care costs.
  • An HSA plan can serve as a powerful employee benefit, helping you recruit and keep top talent. 

If you have questions, please call INB's HSA expert Cayla Keyes, NMLS# 662877, at 217-747-8551.