Offering great employee benefits is important for any company. It goes beyond meeting state requirements. The right perks can address real employee needs, helping you retain top talent while creating a happier, healthier and more productive workforce.
There are many unique benefits you can offer, but one of the most compelling is HSA employer matching. But what is HSA employer matching, and why should you consider it?
What is HSA Employer Matching?
A health savings account (HSA) is a triple tax-advantages account purpose-built to help people pay for qualifying medical expenses. HSAs follow employees throughout their careers and aren’t exclusive to specific employers. However, companies can choose to offer employer matching.
As the name implies, this benefit involves a company contributing funds to an employee’s HSA based on their contributions. There are strict annual contributions for HSAs. However, there are many ways to approach employer matching. From dollar-to-dollar matches to a percentage of an employee’s contributions up to a specific limit, this perk can be a game-changer.
Why Offering HSA Employer Matching Works
Is this benefit right for your company? Here are a few advantages to consider.
Supporting Employee Health
One of the best reasons to offer HSA employer matching is to ensure your team has the means to get the healthcare they need. Many people forgo medical treatment due to its high cost. Even if they have a high-deductible health plan (HDHP) required to open an HSA, out-of-pocket costs stand in the way.
When you contribute to an employee’s HSA, you lift some of that financial burden. That could encourage your team to get the care they need. Plus, it creates less stress.
A Powerful Financial Benefit
The unique thing about HSAs is that the funds don’t expire. They roll over, and the funds grow for however long your employee has this account. Employer contributions are tax-free, and your employers won’t pay a dime in taxes if they use the funds on qualified medical expenses.
It’s like getting “free money.” That alone is enough to make HSA employer matching a competitive benefit.
Tax Advantages
The contributions you make to employee HSAs will reduce your overall tax burden. You can write them off as a business expense. Additionally, the money you contribute through HSA employer matching will lower your FICA tax liability.
Author Resource:-
Daniel Stewart has been helping people with their money management and personal finance with over 15 years’ experience in business finance. You can find his thoughts at HSA strategy blog.
