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HSAs Are Good for Both Businesses and Employees [Infographic]

March 1, 2017
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As we’ve discussed before, businesses with fewer than 50 employees have HSAs Are Good for Both Businesses and Employees [Infographic]several choices when it comes to health insurance options for small groups. According to an infographic and information from Discovery Benefits, health savings accounts (HSAs) emerge as a clear winner for small business health insurance. As the infographic shows, HSAs offer numerous benefits for both businesses and employees.

Infographic: HSA Benefits for Businesses and Employees

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Source: Discovery Benefits

HSA Benefits for Businesses

According to the infographic, HSAs, which must be paired with a high-deductible health plan (HDHP), offer employers a number of advantages:

  • Cost savings. HDHPs are often more affordable than other small business health insurance options.
  • Tax advantages. All employer contributions are tax deductible.
  • Employee retention. Benefits packages that include HSAs are more robust compared to other plans—which can help boost employee retention.

HSA Benefits for Employees

HSAs also offer perks to employees, including:

  • Triple tax savings. Employee contributions are not taxed, withdrawals that go toward authorized expenses are tax-free, and the account earns tax-free interest on the balance.
  • Balances that roll over. Unlike other small business health insurance options, such as a flexible spending account (FSA), money in an HSA rolls over to the following year and beyond, ensuring employees don’t lose money they have accumulated.
  • Cost savings. Money employees contribute to an HSA is not taxed, which means they save on authorized medical and related expenses.
  • Retirement savings. Because an HSA is a savings—not a spending—account, employees can grow their money over the years, building up tax-advantaged funds that can eventually be used for retirement.

Conclusion

Curious if an HSA could work for your small business? We’ve written extensively about HSAs as a good complement to small business health insurance. Check out these articles for more information:

The Comprehensive Guide to the Small Business HRA

What questions do you have about HSAs and small business health insurance? Let us know in the comments.

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