Why Offer an HSA? Plus, See the 2023 HSA Limits!
A Health Savings Account (HSA) is regulated by the IRS, including maximum amount of pre-tax dollars that participants are allowed to contribute to their HSA each year. The 2023 HSA limits are:
- Self-Only Coverage
- ANNUAL MINIMUM DEDUCTIBLE
- MAXIMUM HSA CONTRIBUTION
- MAXIMUM OUT-OF-POCKET
- CATCH UP (55 YEARS OLD OR OLDER)
- Self-Only Coverage
- Family Coverage
There are several reasons why an employer might want to offer a Health Savings Account (HSA) to their employees, so why offer an HSA?
- Cost Savings: HSAs can be a cost-effective way for employers to offer healthcare benefits to their employees. This is because HSAs are paired with a qualified high-deductible health plan (HDHP), which means that the employer’s insurance premiums are lower than they would be for a traditional health plan.
- Tax Benefits: HSAs are unique in that they carry a triple tax advantage. Triple tax advantage means that contributions go into the account tax-free, existing funds grow tax-free when invested, and withdrawals are tax-free when used for qualified medical expenses. Plus, after the age of 65, withdrawals for non-qualified medical expenses are simply taxed at your regular income tax rate and no longer carry the same penalty as before.
- Employee Satisfaction: Offering an HSA as part of a benefits package can help attract and retain employees. Employees appreciate having control over their healthcare spending and the tax advantages that come with an HSA.
- Flexibility: HSAs offer flexibility in how funds are used to pay for healthcare expenses. Employees can use their HSA funds to pay for a wide range of medical expenses, including deductibles, co-payments, and prescription medications.
- Portability: HSA accounts are owned by the employee, which means that they can take their HSA with them if they leave their job or retire. This makes HSAs an attractive option for employees who are concerned about their long-term healthcare expenses.
- Savings: HSAs are a fantastic way for employees to save money for medical expenses at retirement. They can also continue to contribute to the account after they leave the employer, provided they maintain a qualified HDHP.
BASIC has been a leader in benefits administration for over 30 years, and our HSA Administration can help your participants get more value from their healthcare dollars. BASIC HSA pairs with any qualified high-deductible-health-plan and takes advantage of the smart BASIC Card, which can directly pay for expenses from the HSA! Participant funds also earn interest on both their cash account and investment account. Participants can choose a maximum cash balance that automatically transfers any excess funds into their HSA investment accounts.