Your guide to health savings accounts

When it comes to offering health insurance to your employees, it is hard to understand what types of options are out there that are actually going to be affordable to your company. This causes a lot of frustration for employers as you want to offer health insurance but you really cannot afford to do it like the larger companies can. This is where it helps to know all of your options and you will greatly appreciate having a health savings account. A health savings account is wonderful because it can provide you with the ability to offer health insurance options to your employees but without the cost.

Small businesses will greatly appreciate health savings accounts because they allow you to provide something to your employees and you won't get caught up in the higher cost of health insurance that comes for most small businesses. What is an HSA and how does it work exactly? An HSA is short for Health Savings Account and it works similar to an investment account as you have money pulled out of your paycheck and put into this account. This money is free from taxes and is to be used only for medical needs. You will have the HSA funded by the individuals and then the business may choose to contribute to it or not. The HSA needs to be linked to an insurance plan that has a higher deductible amount. Usually the people that have HSA will have a $2,000 deductible.

Every time you visit the doctor you will use the money from your HSA and then once this money is used up your insurance plan will go into effect. So why would your employees be interested in this type of plan? Here are just a few of the reasons why:

1. With the annual contribution amount you pay toward the HSA you will end up matching your regular deductible amount. However you have the ability to use the money now and to pay for expensive medical needs now and not in 6 months when you have had a chance to save the money.


2. Employers can choose to make contributions or not. This is a great bonus to add to your staff and to show them that you are invested in their health and wellness.


3. To create the HSA you will need to work with the insurance provider. They typically set it up for you and then will create the individual accounts for your employees that participate in the program.


4. Employees have control over the assets in the account and the money will roll over to the next year if they do not use it.

To learn about HSA's you should first contact the insurance company you are already familiar with. They can give you insight to the account and if this is something you should consider switching to. Once you get a quote from them you will then need to work on finding quotes from other health insurance companies as well to see which company can provide you with the lowest rates.

Check online to see if there are some HSA accounts available. You will likely find a lot of great plans online and they may be able to beat out any of the plans that the insurance company is trying to provide you with. Always comparison shop as this is the only way for you to know if you are able to get the best deal out there for your organization.

Make sure you bring in the insurance specialist to talk to your staff about the new program and how it works. When the information comes from a professional it will resonate better with your employees.