Health Savings Accounts
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.
What is an HSA?
An HSA allows your employees to open a pre-tax savings account and combine it with a High-Deductible Health Plan. The HSA pays for qualified health care expenses with tax-free money until the individual has met the deductible; then the insurance coverage takes over.
What can an HSA do for your Company?
- Payroll Savings – You can save at least 7.65% in payroll taxes for every employee dollar contributed to a pre-tax benefit plan. With HSAs, which can be run though your 125 Cafeteria Plan, you can offer your employees an incentive that will increase participation. Higher participation and more contributions generate more savings for you through decreased payroll taxes.
- Offset Rising Premiums – You can offer your employees an alternative to insurance policies with high premiums. This is particularly beneficial to small employers, who can continue to provide safety-net coverage through a low-cost, high-deductible health plan.
- A More Diverse Benefits Package – Employees can use their Section 125 Cafeteria Plan funds to pay for their HSA insurance premiums, thereby using pre-tax Cafeteria Plan dollars over after-tax dollars. Imagine the increased participation levels to a Cafeteria Plan when employees are offered this new benefit.
- Portability – The individual owns the account. That means the HSA remains with the employee even if you change your company’s health insurance offerings.
- Employer Contributions – Both employers and employees can contribute to an HSA in the same plan year, up to the maximum contributions of $3,350 for individuals and $6,650 for families effective 2015. This will provide another participation incentive.
HSA Limits for 2017
- HSA holders can choose to save up to $3,400 for an individual and $6,750 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,400 for an individual and $7,750 for a family) - and these contributions are 100% tax deductible from gross income.
- Minimum annual deductibles are $1,300 for self-only coverage or $2,600 for family coverage.
- Annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) cannot exceed $6,550 for self-only coverage and $13,100 for family coverage.
|Maximum Out-of-Pocket||$6,550 single/$13,100 family|
|Minimum Deductible||$1,300 single/$2,600 family|
|Maximum Contribution||$3,400 single/$6,750 family|
|Maximum catch-up contribution
for individuals age 55 or older
As an employer, one of your most difficult challenges is providing affordable healthcare benefits that will satisfy your employees. HSAs may be your answer. That's why we have partnered with two industry leaders, The Bancorp Bank and Metavante Healthcare to build a full service integrated HSA platform solution for our mutual clients. myHSAver.com is a powerful solution that empowers HSA account holders with all of the tools they need to make smart and informed decisions.
The web site provides secure 24/7 access to:
- Account balances and history
- Deposit & withdrawal capabilities
- Important forms & documents
- Up-to-date payment history
- Recent news and benefits updates
- Account statements
- Investment options - a self directed brokerage account through NFS (Fidelity Investments)
In addition, we've streamlined and simplified the processes for employers to offer HSAs to their employees with a paperless spreadsheet or online enrollment process, a custodial fee waiver every month there is an electronic contribution in the account or for accounts with balances exceeding $2500. A single debit card payment solution, and a Free checkbook with first 50 checks for account holders.
The myFlexResource debit card powered by Metavante provides employees a convenient way to access their HSA funds for qualified medical expenses right at the point of service. Since the myFlexResource incorporates single multi purse payment technology solutions, it works with all other reimbursement accounts as well such as limited purpose FSAs or HRA accounts.
*American Benefits Group
- Manage relationship with employer
- Manage enrollment/eligibility
- Monitor participant's liquid account balance
- Provide tier one customer service
Alegeus (Debit Card Provider)
- Issue cards and manage cardholder activity
- Transfer card transaction data to American Benefits Group and Bancorp Bank
- Validate member account balances
- Process point-of-sale transactions from MC/Visa networks
Avidia Bank (Trustee)
- Create custodial accounts for participants
- Provide welcome kits and checkbooks to participants
- Process contribution data (employer and employee credit accounts)
- Fund debit transactions with sponsor bank
- Provide account statements and reporting (1099 and 5498)
- Provide customer service
*American Benefits Group is authorized by the Avidia Bank, the HSA trustee to assist HSA accountholders in the establishment and management of their accounts. Through www.amben.com/WealthCare we deliver a dynamic full service administrative solution that fully connects the HSA with other employer sponsored reimbursement accounts.