HSAs for Businesses

Health Savings Accounts (HSAs) have become the fastest-growing product in the health benefits industry for good reasons. High Deductible Health Plans dramatically lower health insurance costs for employers while employee-owned accounts provide control and freedom for routine health expenses.

When launching an HSA program for your employees, consider the following industry best practices to maximize adoption and minimize confusion:

	Contribute to the HSA
		It is imperative that you contribute money to your employees' HSAs. Whether you are replacing an existing plan with a high-deductible one or are giving your workers a health plan for the first time, contributing to their HSAs is necessary to address the deductible risk they now face.  Consider contributing 50% of the health plan's deductible to each of your employees' HSAs.
	Rollover Education
		There have been a number of new laws that help employees to jump-start their HSAs. If your company or employees used to have an FSA or HRA, they can make a one-time transfer of those balances into an HSA. Additionally, employees can now also make one-time transfers from IRAs into their HSA.
	Cafeteria Plans Aren't Necessary
		Don’t worry about not having a pre-tax cafeteria plan (or what is called a Section 125 plan) in place. If your employees don’t get their HSA contributions on a pre-tax basis via payroll deduction, they can take it as a tax deduction on their tax returns at the end of the year.
	Consider Complete Employee Control
		For employers wishing to utterly simplify health insurance, an increasingly popular approach is to provide employees with a fixed dollar amount per month for buying health insurance and making HSA contributions. This requires minimal administration as employees choose a plan on their own. This approach, known as defined contribution, maximizes employee control and provides significant employer savings.