Health Spending & Saving Accounts

Healthcare can get expensive. We can enhance your employee benefits package with a Flexible Spending Account or a Health Savings Account that helps your employees save money on everyday healthcare expenses.

While typical healthcare insurance can be very effective for many of your business’ employees, out-of-pocket medical expenses, such as deductibles and co-payments or dental charges, can still present serious financial challenges. In turn, that increases the risk of employees not seeking necessary treatment. This could lead to the potential worsening of health problems, which could leave some employees unable to work.

Flexible spending accounts (otherwise known as FSA) and Health Savings Accounts (otherwise known as HSA) is a way for employees (and employers if they chose) to put money aside specifically to pay for these out-of-pocket medical expenses.

The other big advantage to both FSA & HSA is that money put in to the account is not taxable. This results in a reduction in the payroll taxes paid both by the employing business and the employees.

Flexible Spending Account
This is not a typical investment, as the money does not grow, but it is an effective way of managing money for a specific purpose.

It is important to note that any contribution from the employer is payable as a lump sum at the start of the year, and will be available to the employees even if the employee leaves the job. The employee pays their contributions to the flexible spending account (FSA) over the year in regular installments.

Generally speaking, FSA should be offered only to employees who are also eligible to participate in the employer’s major medical plan. It is also important to note that, unlike health savings accounts, employers are not required to offer a high deductible health plan (HDHP) in order to offer an FSA.

Health Savings Account
This is an investment account, the money does receive interest. All monies contributed and interest earned is tax free is used for qualifying medical expenses. Monies are owned by the employee and can be accessed anytime. Monies can be used for non-qualifying purchased with a penalty and tax prior to age 65. After age 65 all monies in the account not used for medical expenses are taxed based on current tax income bracket the same as a traditional retirement account.

There is no use-it-or-lose-it rule, meaning employees can save and invest when they can or spend on eligible healthcare expenses as needed. Employers receive FICA tax savings for every employee who contributes to an HSA.

To enroll in a HSA, employees must already be enrolled in an HSA-qualifying high deductible health plan (HDHP).

An HSA is a personal savings account owned by the employee. They can keep it even if they change jobs or retire. Employees can save and invest their funds with over 30 investment options. HSA funds roll over year to year, allowing long-term growth if there are no immediate spending needs.

The Value for Employees
Triple tax savings
Every dollar an employee contributes to an FSA or HSA lowers their taxable income, funds grow tax-free, and withdraws for qualified expenses are tax-free.

Easy Spending and Account Management
Employees will receive a Debit card linked to their FSA or HSA that can be used for eligible purchased. Account information can be securely accessed 24/7 online and through a mobile app.

The Value for Employers
Cost Savings
Since contributions are taken out pre-tax, no payroll taxes are due on the amounts employees contribute to an HSA & FSA.

Employee Engagement
Helping employees save money on their everyday expenses can aid in employee retention and recruitment. Employers can also make contributions to the accounts to encourage adoption. Helping employees save money on their everyday medical expenses can aid in employee retention and recruitment.

Expert Support
The client relationship team is eager to answer questions and provide assistance.