It seems like everywhere you turn, there are “Hiring” signs posted. A lot of business owners are having to raise their wages and offer better benefit packages to attract or retain employees. If you need to do the same, a Health Savings Account (HSA) can be a great asset to your employee benefit package. Also, an HSA can be an added benefit for the business as well by taking advantage of all the account has to offer.

A Health Savings Account allows the accountholder to set aside money on a pre-tax basis to pay for qualified medical expenses. These qualified medical expenses typically include deductibles, copayments, coinsurance, and some other expenses like prescriptions, vision care, and dental care. By setting money aside in an HSA, usually it allows accountholders to lower their overall health care costs.

No matter your employee’s healthcare plan, there are still out-of-pocket expenses before their deductible is met. This is especially true for high deductible plans so offering an HSA to employees with high deductible plans can be a huge benefit. Since the account is designated for healthcare related expenses, it encourages your employees to save money for these expenses, planned or unplanned.

Health Savings Accounts also offer tax advantages for both the business owner and employee. Contributions are not subject to federal income tax when they are deposited into the employee’s account. Any withdrawals made from an HSA, if for qualifying medical expenses, are tax free as well. Depending on the nature of the HSA program your business goes with, you could potentially benefit from lower payroll taxes.

Certain HSA programs don’t include employer contributions to employee HSAs in employee income, so they are not subject to federal income tax, Social Security, or Medicare tax. Please consult your ta advisor before deciding to offer or open an HSA, as they can advise you on your business’s individual situation.

Other benefits to note are that HSAs have very little administration involved. You can offer the service of setting the HSA up for your employees or they can go to the bank you choose and set it up themselves. Additionally, the funds will roll over year over year. The funds can even be saved and used for medical
expenses in retirement.

If you’re looking to invest in your business and employees, offering a Health Savings Account may be right for you. The associates at Mid America Bank would love to talk more with you about our Health Savings Account program. You can also visit our website for more information.

Brad Roling is the Columbia Market President for Mid America Bank. Brad has more than 10 years of banking experience that he uses to help businesses in and around Columbia thrive. When he is not helping your business with its financial needs, Brad is serving the community in a variety of capacities. He is proud to serve on the Ronald McDonald House Mid-Missouri Board of Directors as Treasurer, the Columbia Chamber Foundation Board, and Beta Theta Pi Advisory Board. Brad is a proud Mizzou grad and loves cheering on the Tigers!