Health Savings Accounts can be a critical benefit that supports employees’ physical and financial well-being — and more employers are focused on not letting these tools fall through the cracks of open enrollment.
HSAs give employees the chance to pay for eligible medical expenses on a tax-free basis. Eighty-two percent of employers currently offer an HSA, according to research from Willis Towers Watson, and another 2% are considering adding one in the near future.
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“HSAs create a level of certainty in a very uncertain world, and put individual employees more in control,” says Becky Seefeldt, vice president of strategy at Benefit Resources, a third-party administrator focused on pre-tax benefits. “HSAs have the ability to make employees more informed consumers and offer a better claims experience over time. The employer is going to see the benefit in the longer term because they're able to prevent premium increases from going up at exponential rates.”
With
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These accounts provide employees with a triple-tax advantage: they can make contributions on a pre-tax basis; the savings will grow free of taxes over time; and tax-free withdrawals can cover qualified medical expenses. HSAs can serve as a financial safety net, preventing employees from turning to more drastic measures like a payday loan, or even dipping into their
“Younger workers may only have a select amount of benefits that they can choose from, and one of those plans may be the HSA with the high deductible health plan,” Seefeldt says. “A lot of times that plan is going to be more cost effective for them, it's going to allow them to save money just on premiums alone.”
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Employees who put just $25 a week into an HSA will save $1,300 in only a year, Seefeldt says. Additionally, if the employee switches jobs, the money they’ve contributed to their HSA goes right along with them.
“It's a little bit more advantageous than some of the other benefits that are out there,” she says. “Employees can use that money wherever they go, even if they end up in a different