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This is how an HSA gives employers cost control and flexible plan design

Posted by K. Fry on January 24, 2018
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Small business employers are turning to Health Spending Accounts to regain control of their benefit costs and offer flexible plan design for their employees.


There are no premiums with an HSA

The employer decides the dollar amount available to put into the HSA. Benefits are based on this budget and what the employer would like to provide for themselves and their employees. A Health Spending Account can be thought of as a bucket of money provided by the employer to the employees. The employees use their individual benefits bucket to claim all their health and dental bills, up to their benefit bucket limit, set by the employer.

The employer is also included and makes use of the plan the same way, assigning their own benefit bucket limit. Claim reimbursements paid out of the benefit buckets to employees are tax-free. The payout to the employee is a pre-tax expense for the employer.

The employer does not pay anything until the employee claims from their benefit bucket. This makes a Health Spending Account easy to understand, with all of the benefit available when and where it's needed by the employee and their dependents.

Get a Flexible Plan Design

The employer can set different benefit levels for different employees, by naming different classifications. Employee classifications can be the same for all employees or varied as required.

An HSA makes it easy for an employer to be creative and specific by using different classes for different employees. For example: the annual HSA limit for a General Manager supporting a family may need to be higher than a newly hired customer service representative with no dependents. A few examples of classes are: tenure, occupation, number of dependents or as a percentage of the employee's annual income.

 

Related Reading: 

Eligible Expenses with a Health Spending Account

5 Reasons an HSA is better than a traditional insurance plan


Are you a small business owner with staff? See the 24 FAQ or download our free guide below.

The Beginner's Guide to Health Spending Accounts GROUP HSA Employee Benefits 2018