Health savings accounts (HSAs) may be the answer to out-of-control costs, but they certainly raise a lot of questions. If your company is considering one, make sure you communicate that:
1. An HSA may not increase take-home pay.
Though HSAs on average reduce healthcare costs by about a third, for some employees, this is a long-term benefit. Though employees may end up retaining more of their earnings in their health savings accounts, they won’t necessarily have more discretionary income at the end of the month.
2. But it will reduce income taxes.
The amount an employee puts into an HSA account is a direct tax deduction. And interest on the account is tax-free, too. That means that for every dollar that stays in an HSA, taxes are reduced by roughly 25 cents.
3. HSAs aren’t for everyone.
One-third of people who sign up for an HSA don’t meet the right criteria or wouldn’t benefit from it. Employees must have the right kind of health insurance plan in place, not be enrolled in Medicare, or have certain health issues for an HSA to make sense.
As with any healthcare solution, one size does not fit all. If an individual is comfortable with his or her existing coverage, doesn’t want the personal responsibility of making healthcare decisions, or would neglect treatments to save money, an HSA may not be the right option just yet.
For more information on how to communicate more effectively to your employees about HSAs and other healthcare issues, contact Pam Bales at pbales@workingwell4you.com.
The 3 Facts Your Employees Must Know About HSAs