According to a survey, Human Resources became a place of trust for workers who were lucky enough to keep their jobs during the COVID-19 pandemic. While financial stress went up, the desire for better healthcare options, financial wellness, and financial literacy increased.
One healthcare option that should be on your radar is the High Deductible Health Plan (HDHP)/Health Savings Account (HSA). HDHPs were introduced in 2003 and have risen in popularity ever since. Today, 51% of the workforce is enrolled in this type of plan. HSAs are paired along with the plan to help employees save money for medical expenses tax-free and any future expenses that come up.
Even though the HDHP/HSA combo is considered a tax saver for employees, there are several reasons why this offering can be highly beneficial to employers.
A Powerful Combo that Every Employer Should Offer
By adding an HDHP/HSA to a benefits package, employers can offer quality health insurance, medical tax savings, and an additional investment tool for their employees.
It is important to note that though overall adoption is still low among employees due to a lack of education, HSAs continue to grow in popularity in recent years. They are becoming a must-have part of a benefits package. Employees who sign up will either save money on medical expenses or invest in future retiree medical costs.
When you take all the steps to ensure your employees’ financial wellness today, and in the future, you create happier employees and ensure that you retain them.
HSA Tax Benefits Aren’t Just for Employees
A lot has been written about the numerous tax benefits of owning an HSA for employees. However, as an employer, offering an HSA will offer its own set of benefits.
Since employees will make their HSA contributions pre-tax, the IRS doesn’t count that as salary, therefore, both you and your employees save the 7.65% FICA taxes on them.
Additionally, an HDHP/HSA allows you to save money on costly insurance premiums without sacrificing quality healthcare for your employees. Also, as employees learn to take charge of their own health care and you have the potential for lower increases on your annual premiums.
Finding the right components for an enticing benefits package can sometimes be challenging. The HDHP/HSA is definitely a step in the right direction.
