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Small Business Employee Benefits and HR Blog

2 Ways You Can Contribute to a Health Savings Account (HSA)

Last week, we discussed the 2 ways an employer can contribute to an employee's HSA. This week, we're going to talk about the ways an Employee can contribute to his or her Health Savings Account (HSA).hsa (1)

Employees can make contributions to an HSA in two ways:

  1. Post-tax contributions that are deducted on the employee's individual tax-return
  2. Pre-tax contributions through their Employer's Section 125 Plan 

Post-tax contributions that are deducted on the employee's individual tax-return

Employees can make contributions to their HSA on a post-tax basis. They then take an "above-the-line" deduction on their personal tax return to get the taxes back.

Pre-tax contributions through their Employer's Section 125 Plan

When using a Section 125 plan for HSA contributions, the contributions are not subject to individual or employment taxes, and the employee does not need to take the "above-the-line" deduction on their personal tax return.

See IRS Publication 969 for more information 

How do you contribute to your HSA?

Our eBook explains how.