Did you know that you can use a Health Spending Account (HSA) as a group plan?
An HSA allows businesses to contribute pre-determined amounts to employees for their health care expenses. These contributions are tax-exempt, reducing a company’s taxable income by a large margin while also providing excellent tax-free benefits for employees.
Likely the greatest thing about HSAs is that they allow employees to choose how they want to spend their health care dollars. Often, traditional group health benefits plans don’t end up being 100% beneficial for each employee. Unfortunately, we don’t get to choose the health issues we will face in life, so why be part of a plan with predetermined illness’ your insurer will and won’t cover? An HSA will ensure your individual health needs are taken care of.
Fortunately, with HSAs, the employee decides how their benefit money is spent.
Setting Contribution Amounts
As an employer, there are various ways to set the contribution amounts for employees.
Employers may decide to set contributions by class, for example. This would be similar to a group plan because you can contribute a different amount for executives than for part-time employees, for instance. Employers might also decide to set contributions based on a set percentage of their salary, years of service, whether or not the individual is single or married and has a family, what their role is in the company, or the company’s success from year to year.
HSAs are extremely flexible. Employees decide how to best use their funds, and there is no plan design and no limitations. Furthermore, it’s possible to add on travel or catastrophic drug coverage if you decide to, or employees can have a choice to add these benefits on as well.
The Benefits of HSAs
With HSAs, there’s no set plan design. There are no limits or maximums either. Employees have the flexibility to choose how their allocated money is spent. There are no copayments, deductibles, or annual limits — stipulations that often come with traditional insurance policies.
No Mandatory Insurance
As an excellent alternative to traditional coverage, HSAs do not require mandatory insurance coverage. Still, these funds can cover expenses that are covered under traditional insurance polices and those that aren’t.
Any HSA deposits that employers make to their employees’ accounts are fixed. They will not increase or change throughout the year unless employers want them to. Each year, the business owner will control how much they contribute to each employee’s benefits plan and change the amounts at their will. There are no renewals or increases.
Especially Beneficial to Companies With Part-Time Employees
Companies that have part-time employees may not be interested in providing traditional group plans because of their incredible expense. This makes Health Spending Accounts a fantastic alternative.
Looking for a Bit More? Try Our Honeybee Solution
The Honeybee Solution combines insurance and a defined contribution plan into the perfect package for employees. Honeybee has super-fast sign-up, the best cost controls, and an amazing array of covered health care expenses. There are essential medical plans, optional dental, and pooled plans. Head here to book a demo and see Honeybee in action.
Have more questions about Honeybee? Contact a Honeybee expert at email@example.com. Other HSA-related questions can be directed to our Benecaid Customer Care Team by emailing firstname.lastname@example.org or calling 416-626-8786.